Microsoft Tells FTC $69 Billion Activision Deal Will Not Hurt Competition

Microsoft on Thursday responded to a Federal Trade Commission lawsuit aimed at blocking its $68.7 billion acquisition of Activision Blizzard, arguing that it would not harm competition in the video game industry.

The FTC said earlier this month in its lawsuit that the software giant “will hurt competition” between game console manufacturers, including Sony and Nintendo, in objecting to the acquisition. Microsoft opposed its application that the acquisition was about helping the Xbox unit become more competitive.

“Xbox wants to grow its presence in the mobile gaming space, and three-quarters of Activision players and more than one-third of their revenue comes from mobile offerings,” Microsoft said in its 37-page response. “Xbox also believes it does a good job of making Activision’s limited portfolio of popular games more accessible to consumers by putting it on more platforms and making it more affordable.”

The deal, announced earlier this year, is the biggest ever for the software maker as well as the video game industry. Microsoft, which also makes the Xbox video game console, is talking to regulators around the world to get approval for its purchase. Microsoft previously said it expects to close the deal in the summer of 2023.

The FTC’s move against Microsoft marks one of the US government’s greatest efforts to take over the tech industry, which has witnessed companies like Microsoft, Apple, Amazon, Alphabet and Meta become some of the most valuable companies on the planet. Amid all this growth, competitors and regulators are asking whether the tech industry has too much power and whether companies are acting like monopolies.

8, the agency said in its lawsuit against the software giant’s acquisition of the Call of Duty maker, that Microsoft used previous acquisitions to make several high-profile new games exclusive to devices, such as the space exploration game Starfield and the vampire shooter game Redfall. supported by the software. Microsoft said it offered Sony the right to sell the military shooter as part of its PlayStation Plus service, but Microsoft said in its filing that “Sony denies the deal.”

“The acquisition of a single game by the third-ranked console manufacturer cannot upset a highly competitive industry,” Microsoft said in its response. “This is especially true when the manufacturer has made it clear that it will not discontinue the game. The fact that Xbox’s dominant competitor has so far refused to accept Xbox’s offer does not justify blocking a transaction that would benefit consumers.”

Microsoft said it hopes an amicable solution can be found that benefits the entire industry.

“Even with the confidence we have in our cause, we remain committed to creative solutions with regulators that will protect competition, consumers and employees in the technology industry,” said Brad Smith, Microsoft’s president and vice president. said.

Activision CEO Bobby Kotick also defended the deal in a separate statement on Thursday, saying, “There is no logical, legitimate reason to prevent our transaction from closing.”

The FTC did not immediately respond to a request for comment.

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