Microsoft responds to FTC attempt to block Activision Blizzard deal

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microsoft On Thursday it filed a response to a U.S. regulator’s antitrust lawsuit seeking to stop a software maker from buying a video game publisher. activision blizzardsaid the deal would not harm competition.

The Federal Trade Commission’s challenge to the proposed $68.7 billion acquisition is the biggest government backlash Microsoft has dealt with at home since it confronted the Justice Department 20 years ago over Windows’ dominance in the operating system market. It stands out as

Under President Donald Trump, Google-owned Alphabet, Apple, Amazon and Facebook parent company Meta have all faced inquiries from U.S. competition authorities. So Microsoft got down to business and continued to expand its acquisitions throughout the election of President Joe Biden. Even after Biden-appointed tech commentator Rina Khan took over her FTC. But then Microsoft revealed plans to acquire his Activision Blizzard. On December 8, the FTC claimed that the transaction violated federal law.

In a statement provided to CNBC, Brad Smith, president and vice chairman of Microsoft, said, “We are confident in our case, but we are working with regulators to ensure that competition in the technology sector, consumer We continue to work on creative solutions that protect workers.” “As we have learned from past litigation, the door is never closing on the opportunity to find an agreement that benefits everyone.”

To mitigate government opposition to the deal, Microsoft offered concessions.

In October, Microsoft’s gaming division CEO Phil Spencer said Microsoft had committed to bringing Activision Blizzard’s Call of Duty game to the Nintendo console for 10 years and keeping the game on Valve’s Steam games store. rice field.Microsoft also offered to sign a 10-year deal Sony We’re releasing the Call of Duty game on PlayStation consoles the same day it hits Microsoft Xbox consoles. “Sony is denying the deal,” Microsoft said in a filing.

Activision Blizzard does not offer new games through subscription services such as Microsoft’s Game Pass, and the acquisition will make Activision Blizzard’s games more affordable to play, Microsoft said.

“One game acquisition by the third-largest console maker cannot overturn a highly competitive industry,” Microsoft said in a response. “This is especially true when manufacturers make it clear they will not put games on hold. The fact that Xbox’s dominant competitors have so far refused to accept Xbox’s offer blocks deals that benefit consumers.” It does not justify doing so.”

After Microsoft spent almost a year investigating the deal and went through millions of documents from Activision Blizzard and Microsoft, the FTC has shown no evidence that Microsoft is looking to remove the game series from the PlayStation. It’s good for Microsoft’s business to make the game widely available, the company said.

Outside the US, Brazil has agreed to proceed with the deal, which the UK is scrutinizing.

Microsoft has refuted the FTC’s allegations. In the lawsuit, the FTC said Microsoft had promised the European Commission that it had no incentive to prevent games from ZeniMax, a game publisher Microsoft acquired in 2021, from being played on non-Xbox consoles. The contract with ZeniMax from the commission said the company would exclusively create some ZeniMax games.

Microsoft said, “The European Commission publicly stated the day after the complaint that Microsoft had not made any ‘commitments’ to the European Commission, admitting that it was not misleading. Future distribution strategy for ZeniMax games.

The case will be before FTC Administrative Law Judge Michael Chappell. Microsoft said the FTC proceedings violated Microsoft’s rights to procedural due process under the Fifth Amendment to the US Constitution.

The UK Competition and Markets Authority has sent out more than 2,100 emails from the public in response to a statement outlining three ways the deal could undermine competition. About 75% of the emails expressed support for the acquisition, the agency said Wednesday.

If the deal goes through, Microsoft will become “the world’s third-largest gaming company behind Tencent and Sony,” Spencer said on a conference call the day the deal was announced.

In the months that followed, two groups of Activision Blizzard employees voted to form a union. Microsoft says it is working to make it easier for employees to decide whether to join or form a union.

In a statement provided to CNBC, Activision Blizzard CEO Bobby Kotick said, “There is no reasonable and justifiable reason to prevent us from completing the transaction.” and there are few barriers to entry.More devices than ever before have given players a wide range of choices for playing games.Engine and tools are freely available to developers large and small. With the game’s wide range of distribution options, we believe we can win this lawsuit on merit.”

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