Microsoft Corp plans to buy “Call of Duty” maker Activision Blizzard Inc. for $68.7 billion on Tuesday, after a group of gamers challenged the deal in court, alleging that the acquisition would unlawfully destroy competition in the video game industry. hit another obstacle.
The federal antitrust lawsuit, filed in San Francisco, comes less than two weeks after the Federal Trade Commission filed a lawsuit to block a merger between Activision Blizzard, one of the world’s largest video game publishers, and Xbox console maker Microsoft.
Private lawsuits were filed on behalf of 10 video game players in California, New Mexico, and New Jersey.
Similar to the FTC case, players are seeking a court order prohibiting the companies from completing the merger, voiding the separation fee and paying their legal costs.
The players lawsuit alleges that the merger would violate the Clayton Antitrust Act by reducing competition in the gaming industry and thereby hurting the public.
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Their complaint cites concerns that the union will empower Microsoft at many levels of the gaming industry “to shut down competitors, limit production, reduce consumer choice, raise prices and further stifle competition”.
“Microsoft has already demonstrated that it can and will withhold content from gaming competitors,” Holly Vedova, FTC’s Director of the Competition Bureau, said in a press release. “Today, we’re trying to prevent Microsoft from taking control of a leading independent game studio and using it to undermine competition in multiple dynamic and fast-growing games markets.”
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A Microsoft representative on Tuesday defended the deal and said in a statement that it would “increase competition and create more opportunities for gamers and game developers.”
“We have full confidence in our case and we welcome the opportunity to present our case in court,” said Microsoft President Brad Smith following the FTC lawsuit.
“As the video game industry continues to grow and evolve, it is critical that we protect the market from monopolistic mergers that will harm consumers in the long run,” Joseph Saveri, the plaintiffs’ attorney in San Francisco, said in a statement.
Private plaintiffs can pursue antitrust claims in U.S. court even when a related U.S. agency case is pending.
The takeover, announced in January, is also facing antitrust scrutiny in the European Union.
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Reuters contributed to this report.