FTC Sues Microsoft to Block Activision Deal in a Rematch for the Ages

Grab your popcorn, your foam fingers, your Funko Pops, and fire up that Twitter feed while it still functions. The grudge match of the century is about to take the world of videogame lawsuits to a new level. On December 8, 2022, the Federal Trade Commission sued Microsoft, a level of scrutiny the company hasn’t seen since the late 90s. This is over Microsoft’s proposed acquisition of Activision Blizzard, the $69 billion bombshell the House of Xbox has been preparing for June 2023.

The news was broken by the Washington Post but confirmed within minutes by a press release from the FTC itself. This “Administrative Complaint” seeks to prevent the merger from happening, alleging it would open the door for Microsoft to “suppress competitors” to not only the Xbox consoles, but the company’s subscription services and cloud-gaming business. Game Pass is a big factor here, basically.

Related: Microsoft Officially Acquires ZeniMax Online, Talks Exclusivity & More

Last year’s Bethesda acquisition is pointed to in the release here as proof-positive Microsoft isn’t above anti-competitive action, citing the moves to make upcoming games like Redfall and Starfield Xbox exclusive. The amount of leverage the ludicrously profitable IP Activision Blizzard would provide is monumental, hence why arguments around Call of Duty have been so prominent in similar legal proceedings (such as an ongoing investigation in the UK).

All we have at the moment really is Microsoft’s word it won’t be restricting platforms for Activision’s biggest properties. And to be fair to Microsoft, it could just as easily point to Minecraft as evidence on its side. But clearly the FTC disagrees for now, especially since they accurately point out Activision Blizzard is one of the few companies of its size publishing games across multiple platforms.

Related: New York City Files Another Activision Blizzard Lawsuit

While the individual people involved are obviously different, this isn’t Microsoft’s first tussle with the FTC. An investigation was started in the early 90s to examine Microsoft as a possible Monopoly in PC software and hardware, although it stalled due to a split vote. But the Department of Justice picked up the ball shortly after, resulting in a legal conflict that lasted into the new decade.

Related: Nintendo Isn’t Joining the Acquisition Arms Race Anytime Soon

Microsoft narrowly avoided being split up, due to a mistake made by the original judge who declared it was indeed an abusive monopoly. That said, the appeal case still ended in a settlement in which Microsoft had to concede with several policy changes and share its APIs. So with the FTC’s three to one vote this time, we’re looking at a nasty rematch. You know, figuratively speaking.

Related: Stadia’s Phil Harrison Reportedly Points to Microsoft as One Reason for Studio Shutdowns

All of this is happening while Activision Blizzard itself is in its own state of legal chaos, facing several lawsuits from former employees, unionization efforts and an ongoing lawsuit from the state of California’s Fair Employment and Housing body. Diablo IV’s development turmoil also got its own reporting spotlight today as well. What a mess!