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FTC Looks To Block Microsoft Buy of Activision with Lawsuit

Microsoft's record-breaking purchase of video game company Activision Blizzard is in trouble after the Federal Trade Commission filed suit to block the sale on Thursday.

The FTC announced that the $68.7 billion proposed acquisition, which, if finalized, would be the most expensive in U.S. history, would "suppress competitors," if Microsoft was to go ahead with the purchase.

"With control over Activision's blockbuster franchises, Microsoft would have both the means and motive to harm competition by manipulating Activision’s pricing, degrading Activision's game quality or player experience on rival consoles and gaming services, changing the terms and timing of access to Activision's content, or withholding content from competitors entirely, resulting in harm to consumers," said the FTC in a statement announcing the lawsuit.

Thursday's actions by the regulatory commission is just the latest in governmental scrutiny over the merger. The European Commission also announced its own investigation into Microsoft’s proposed acquisition of Activision in November.

In response to the lawsuit filed by the FTC, Microsoft said the acquisition of Activision will not hinder competition, and will provide a higher level of choice in the market.

“We continue to believe that this deal will expand competition and create more opportunities for gamers and game developers,” said Brad Smith, Microsoft's president, in a statement. "We have been committed since day one to addressing competition concerns, including by offering earlier this week proposed concessions to the F.T.C. While we believed in giving peace a chance, we have complete confidence in our case and welcome the opportunity to present our case in court."

This week's lawsuit comes in a week where Microsoft's attempts at countering anti-consumer actions against the deal. Phil Spencer, Microsoft's CEO of gaming, announced a 10-year deal with rival Nintendo to ensure the popular Call of Duty game franchise would continue to be on the Japanese company's platform once the acquisition is finalized. Further, he commented that a similar plan was in the works with Sony.

Microsoft said it is committed to the acquisition and will fight this and any other legal challenges that may arise as the deal looks to close.

About the Author

Chris Paoli (@ChrisPaoli5) is the associate editor for Converge360.

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