May 22, 2022

Activision Blizzard takeover reviewed by FTC is bad news | Xbox One

The start of 2022 will forever be marked by Microsoft’s announcement of its intention to buy Activision Blizzard. This is indeed an intention for the moment that has yet to be examined by several regulatory bodies, including the United States Federal Trade Commission, which is not trivial.

The question of a virtual monopoly on the table

While this kind of takeover is usually studied by the Department of Justice, it is the FTC (Federal Trade Commission, Federal Trade Commission) which will finally study the file of the takeover of Activision Blizzard by Microsoft. This information is once again taken from Bloomberg sources.

The FTC will therefore study the file closely, which is not good news for Microsoft when we know the rather severe positions of the commission towards this kind of process. It will be a question here of deciding to determine if Microsoft will be in a monopolistic position after this acquisition.

As Microsoft intelligently reminded in its press release during the takeover, the group will ultimately only be the world’s third largest in the field of video games at the end of the takeover, but does not hide its ambitions to go further in the future. , with more studio takeovers planned in the future.

The FTC seen as a less flexible institution

The FTC will therefore have to decide on this takeover and determine the risk of harm to Microsoft’s rivals in the event that Activision Blizzard games are exclusive to the Xbox ecosystem.

However, Microsoft wanted to be reassuring in the days following the announcement. Xbox boss Phil Spencer has confirmed that the commitments will be kept.

I have confirmed our intention to honor all existing agreements upon the acquisition of Activision Blizzard and our desire to keep Call of Duty on PlayStation. Sony is an important part of our industry and we value our relationship.

This “desire”-based formulation leaves new questions behind, however, with many wondering what will happen to Call of Duty games once the final deals are struck. For the moment, Microsoft is careful not to freeze anything in stone and there is no doubt that the experts appointed by the FTC will try to shed light on Microsoft’s ambitions on the subject, or even to recover guarantees. in passing.

As Bloomberg reports, the Biden government has placed a lawyer specializing in competition law in the person of Lina Khan at the head of the FTC. Last December, the commission also took legal action to block the acquisition of ARM by NVIDIA, fearing that this acquisition of 40 billion would harm competition between the various players, in particular at the level of data centers and chips. car computers. At the end of January, Bloomberg also indicated that NVIDIA would be ready to abandon this historic transaction.

It remains to be seen what position the FTC will adopt on this issue in the coming weeks, but we already know that Microsoft seems quite sure of its thing. According to Reuters, Microsoft has pledged to pay $3 billion in fees if the takeover fails, suggesting the level of confidence in the company to achieve antitrust approval.

Our articles on the takeover of Activision Blizzard by Microsoft