Microsoft Responds to FTC Attempt to Block Activision Blizzard Deal

Microsoft Filed on Thursday Its answer An antitrust lawsuit by US regulators trying to block a software maker from buying a video game publisher Activision BlizzardThe agreement states that it will not harm competition.

Federal Trade Commission Challenge The proposed $68.7 billion acquisition is Microsoft’s largest government push for Facebook in a Justice Department fight over Windows’ dominance in the operating system market more than two decades ago.

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Under President Donald Trump, Google’s umbrella company Alphabet, Apple, Amazon and Facebook parent Meta have all faced investigations from US competition authorities. This led Microsoft to continue expanding its business further Acquisition With the election of President Joe Biden and even after Biden’s nomination, technology critic Lina Kahn, took At the FTC. But Microsoft revealed it project Buy Activision Blizzard. On December 8 the FTC argued that the transaction violated federal law.

“While confident in our case, we remain committed to creative solutions with regulators that protect competition, consumers and workers in the technology industry,” Microsoft President and Vice President Brad Smith said in a statement to CNBC. “As we’ve learned from our cases in the past, the opportunity to find an agreement that benefits everyone is never closed.”

Microsoft has made concessions to overcome government opposition to the deal.

Bill Spencer, CEO of Microsoft’s gaming unit, said in October that Microsoft would bring Activision Blizzard’s Call of Duty games to Nintendo consoles for a decade and have the games on Valve’s Steam game store. So is Microsoft Will be given to sign a 10-year contract with Sony Microsoft to release Call of Duty games on PlayStation consoles on the same day they reach Xbox consoles. “Sony refuses to settle,” Microsoft said in its filing.

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Activision Blizzard doesn’t make its new games available through subscription services like Microsoft’s Game Pass, and the acquisition will make Activision Blizzard’s games more affordable to play, Microsoft said.

“The acquisition of a game by a third-ranked console manufacturer cannot elevate a highly competitive industry,” Microsoft said in its response. “Especially when the manufacturer makes it clear it doesn’t stop the game. The fact that Xbox’s dominant competitor has so far refused to accept Xbox’s proposal does not justify blocking a transaction that would benefit consumers.”

After spending nearly a year investigating the Microsoft deal and examining millions of documents from Activision Blizzard and Microsoft, the FTC has shown no evidence that Microsoft is trying to pull the game series from PlayStation. Ensuring that games are widely available is good for Microsoft’s business, the company said.

Outside the US, Brazil OK he gave The United Kingdom is reviewing the agreement to continue.

Microsoft pushed back on the FTC’s claims. The FTC said in its lawsuit that Microsoft assured the European Commission that it had no motivation to prevent games from being played on consoles other than Xbox from game publisher ZeniMax, which Microsoft acquired in 2021. The European Commission’s Zenimax agreement meant that the company would exclusively develop certain Zenimax games.

“The European Commission acknowledges that it was not misled. publicly states The day after Microsoft complained to the European Commission that it had made no ‘assurances’, Microsoft said that the European Commission “does not believe any statements made by Microsoft regarding the future distribution strategy of Zenimax’s games”.

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The case will go before the FTC’s Administrative Law Judge Michael Chappell. Microsoft claimed that the FTC’s practices violated Microsoft’s right to due process under the Fifth Amendment to the US Constitution.

Members of the public have sent over 2,100 emails to the UK’s Competition and Markets Authority. Report From the agency detailing three ways the deal would reduce competition. Nearly 75% of emails expressed support for the agency’s acquisition said On Wednesday.

If the deal closes, Microsoft will be “the third largest gaming company in the world by revenue, behind Tencent and Sony,” Spencer said in a conference call the day the deal was announced.

In the months since, two groups of Activision Blizzard employees have voted to form unions. Microsoft has told It also commits to efforts to make it easier for employees to decide whether to join or start a union.

“There is no prudent, reasonable reason to prevent our transaction from closing,” Activision Blizzard CEO Bobby Kodick said in a statement to CNBC. “There is tremendous competition and few barriers to entry in our industry. We’ve seen more devices than ever before to enable players to play games more diversely. Engines and tools are freely available to developers large and small. The breadth of distribution options for games has never been wider. We think we’ll win on the merits.” We believe.”

See: Gaming can often benefit from being platform agnostic, says Cowen’s Doug Krutz.

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