The Federal Trade Commission (FTC) of the United States voted Thursday to prevent Microsoft’s (NASDAQ: MSFT) $69 billion acquisition of Activision Blizzard (NASDAQ: ATVI), claiming that it would hurt competition in high-performance gaming consoles and subscription services by restricting or degrading rivals’ access to popular content.
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The regulator said it is seeking to block technology giant Microsoft from acquiring leading video game developer Activision Blizzard, which owns game franchises such as Call of Duty, claiming that the $69 billion acquisition would allow Microsoft to suppress competitors.
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On Wednesday, Bloomberg reported that Microsoft executives met FTC Chair Lina Khan and other commissioners to make their final case in support of the transaction.
The commission, however, voted 3-1 against the deal, deciding to file the complaint, citing Microsoft’s track record of acquiring other companies and using “valuable gaming content to suppress competition” from rival consoles. It provided an example of Microsoft previously doing this when it bought ZeniMax, the parent company of Bethesda Softworks.
The filing of the administrative complaint initiates a process in which the claims will be heard in front of a judge.
In its statement, the FTC said: “Microsoft decided to make several of Bethesda’s titles including Starfield and Redfall Microsoft exclusives despite assurances it had given to European antitrust authorities that it had no incentive to withhold games from rival consoles,.”
Activision’s games are presently available on a variety of platforms. Still, the FTC believes that if the deal is approved, Microsoft will be able to harm competition by degrading game quality or player experience on rival consoles, changing the terms and timing of access to content, manipulating pricing, or withholding content from competitors entirely.
Activision shares closed Thursday’s session down more than 1%, while Microsoft gained over 1%.
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