FTC sued Microsoft after EU talks

A new report suggests that the FTC filed its lawsuit against Microsoft’s acquisition of Activision Blizzard to delay the EU’s competition ruling.

A new report has suggested that the US Federal Trade Commission filed a lawsuit in opposition of Microsoft’s acquisition of Activision Blizzard in an effort to delay the European Commission’s ruling.

The report comes courtesy of Bloomberg, who says that people who are familiar with the FTC’s decision, but were unable to speak publicly, told the outlet that the lawsuit came as a surprise. The source reportedly said that the decision was designed to pre-empt the European commission’s discussions with Microsoft about potential remedies.

Bloomberg’s sources say that FTC chair Lina Khan opted to file the suit after calling European commissioners, who reportedly said they intended to talk to Microsoft about ways in which the company could resolve issues raised by the acquisition.

Despite European commissioners bringing up potential remedies in the call, sources say that the European Commission had not planned to start those discussions with Microsoft until later in the year.

The reason for the lawsuit was reportedly to “send a strong message” to the European Commission about the FTC’s position on the merger, in line with previous comments made by Khan about scrutinising significant mergers in the tech and gaming space more closely.

It was recently reported that the European Commission might object to the Microsoft deal, with Reuters suggesting that the regulatory body was preparing a statement of objections against the proposed deal. European Union authorities set a deadline of April 11, 2023, to make a decision on the deal.

Call of Duty is one of Activision’s most popular series, and sells high numbers on PlayStation consoles. Picture: Activision Blizzard

Much of the public discussion about the deal has been centred on the potential exclusivity of Activision Blizzard franchises on Xbox consoles. Sony, in particular, has raised concerns that Microsoft has incentive to make the Call of Duty franchise exclusive to Xbox, which Sony argues is unfair for its PlayStation consoles to miss out.

Microsoft has knocked back this concern on multiple occasions, pointing to games such as Minecraft and The Elder Scrolls online as titles that they’ve kept multiplatform even after its acquisition of them. The company also offered a deal to Sony, Nintendo, and Steam, saying that it would be willing to enter agreements that would require it to launch Call of Duty games on those platforms for ten years.

Xbox Game Pass is a subscription service that allows players to play hundreds of games for a small monthly fee. Picture: Microsoft

Microsoft made more Call of Duty concessions as well, offering Sony the opportunity to put the series on its PlayStation Plus subscription service. The offer was made to push back on concerns that Microsoft would still have an advantage over Sony with the series by offering it on its Game Pass subscription service.

Written by Oliver Brandt on behalf of GLHF.