FTC lawsuit could stop Microsoft’s $69 billion takeover of Activision

In a nutshell: Microsoft’s $69 billion acquisition of Activision Blizzard has run into trouble from regulators around the world, but the deal has slowly moved closer to completion over the past few months. However, it could be voided by the US Federal Trade Commission (FTC), which is likely to file an antitrust lawsuit to block the takeover.

According to Politico, which cites three people with knowledge of the matter, an FTC lawsuit is not guaranteed. The publication adds that four FTC commissioners have not yet voted on the complaint and have not met with company lawyers. But with FTC officials reviewing the deal reportedly skeptical of the two tech giants’ arguments, a lawsuit looks like the most likely outcome.

Much of the FTC’s investigation has already been completed, with Microsoft CEO Satya Nadella and Activision CEO Bobby Kotick already removed from office, according to people familiar with the matter. If there is a lawsuit, it will probably come next month.

The deal was also subject to increased scrutiny by the UK Competition and Markets Authority. Again, most of the objections come from Sony, which believes that Microsoft will make the Call of Duty series exclusive to Xbox/PC. And this despite repeated assurances from the Redmond firm that such a move would not happen. Microsoft even offered Sony a 10-year deal to keep the franchise on the PlayStation.

In arguments presented by Sony to the UK regulator, it noted that other games could not compete with CoD, citing Battlefield as an example. “Despite the similarities between Call of Duty and Battlefield, and despite EA’s track record in developing other successful AAA franchises (such as FIFA, Mass Effect, Need for Speed, and Star Wars: Battlefront) – the Battlefield franchise can’t keep up. As of August, over 400 million Call of Duty games have been sold by 2021, while Battlefield has sold just 88.7 million copies,” Sony lawyers said in a statement.

Interestingly, Sony’s filing also mentions the PlayStation 6. The company believes the console won’t arrive until 2027, giving the PS5 a seven-year life cycle.

Regulators in Saudi Arabia and Brazil have approved the acquisition of Microsoft. It is still awaiting approval in other countries, including the UK, which has set a March 1 deadline for a final decision. The European Commission’s investigation is also ongoing. With a possible FTC lawsuit on the horizon, could the deal end the same way as Nvidia’s attempt to take over Arm?

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