Sunday, December 4, 2022
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the takeover will be blocked by the FTC!

The Federal Trade Commission is likely to file an antitrust case to block Microsoft’s $69 billion takeover of gaming giant Activision Blizzard, maker of hit games Call of Duty and Candy Crush, according to three people familiar with the matter.

A lawsuit would be the FTC’s biggest move yet under Chairman Lina Khan to curb the power of the world’s biggest tech companies. It would also be a major blow to Microsoft, which has positioned itself as something of a white knight on antitrust issues in the tech sector after going through its own grueling regulatory antitrust battles around the world more than two decades ago . .

A lawsuit challenging the deal is not guaranteed, and the four FTC commissioners have yet to dismiss a complaint or meet with the companies’ lawyers, two of the people said. However, FTC officials reviewing the deal are skeptical of Microsoft’s arguments, these people said.

The investigation is still ongoing, but much of the bulk of the work has been completed, including clarifications from Microsoft CEO Satya Nadella and Activision CEO Bobby Kotick, people with knowledge of the incident said. If the agency moves forward with a lawsuit, it could come as soon as next month, said the people, all of whom requested anonymity to discuss a confidential matter.

At the heart of the FTC’s concerns is whether the acquisition of Activision would give Microsoft an unfair boost in the video game market. Microsoft’s Xbox is number three behind industry leader Sony Interactive Entertainment and its PlayStation console. However, Sony became the main opponent of the deal, telling the FTC and regulators in other countries that if Microsoft forced hit games like Call of Duty exclusively onto its platforms, Sony would be at a significant disadvantage.

The FTC declined to comment.

To a lesser extent, Google is also opposed to the agreement, according to two of the people with knowledge of the matter. The company argued that Microsoft deliberately downgraded the quality of its Game Pass subscription service when used with Google’s Chrome operating system, and that owning Activision would strengthen its incentive to do so, ultimately driving hardware sales to Microsoft and away from Google, the people said.

The FTC’s concerns go beyond Call of Duty, however, and investigators are trying to determine how Microsoft could leverage future unannounced titles to boost its gaming business, according to two people with knowledge of the filing.

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