Microsoft’s bid to acquire video game publisher Activision Blizzard could reportedly face a major roadblock as early as next month.
The U.S. Federal Trade Commission (FTC) is likely to file an antitrust suit to block the $69 billion acquisition, Politico said, citing people familiar with the matter.
A lawsuit against the deal is not guaranteed, and the four FTC commissioners have yet to vote down a complaint or meet with the companies’ lawyers.
The FTC officials reviewing the deal are skeptical of the companies’ arguments, those people said.
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At the heart of the FTC’s concerns is whether the Activision acquisition would give Microsoft an unfair boost in the video game market.
Microsoft’s Xbox is the number three of leading Sony Interactive Entertainment and its PlayStation console.
Sony is concerned that making hit games like Call of Duty exclusive to its platforms would put Sony at a significant disadvantage.
An Activision spokesperson gave FOX Business the following statement.
“Any suggestion that the transaction could lead to anti-competitive effects is completely absurd. This merger will benefit gamers and the US gaming industry, especially as we face increasingly fierce competition from abroad. We are committed to continue to work with regulators around the world to allow the transaction to proceed, but will not hesitate to fight to defend the transaction if necessary.”
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Shares of Activision fell about 4% during extended trading.
Microsoft announced the deal in January, in the largest gaming industry deal in history.
Microsoft issued the following statement to FOX Business.
“As we have said before, we are prepared to address concerns from regulators, including the FTC, and Sony to ensure the deal is closed with confidence. We will continue to monitor Sony and Tencent in the market after the deal closes, and together Activision and Xbox will benefit gamers and developers and make the industry more competitive.”
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The EU opened a large-scale investigation earlier this month. The EU competition enforcer said it would decide by March 23, 2023 whether to approve or block the deal.