A new report by Politico (opens in new tab) says that the United States’ Federal Trade Commission is “likely” to go to an antitrust lawsuit to prevent Microsoft from executing its takeover of Activision Blizzard (opens in new tab). This is according to sources with insider knowledge of the FTC’s operations, who say the FTC’s investigation staff is “skeptical” of the companies’ arguments.
Likely does not mean guaranteed, however, and the FTC’s commissioners have neither met with lawyers for Microsoft and Activision nor voted on a formal complaint. The FTC declined to comment on Politico’s report.
The FTC, under current Chair Lina Khan, has vowed to be tougher on mergers and acquisitions by already-large tech corporations, which they proved by getting involved in Nvidia’s failed attempt to purchase ARM. The FTC started investigating the deal between Microsoft and Activision earlier this year when it was announced.
Microsoft’s potential acquisition of Activision has been perhaps the hottest topic in this year’s gaming news, and depending on who you listen to would be either a seismic shift in how videogames conduct business or a relatively minor change in power between the big-3 gaming console makers. An FTC lawsuit, however, would be huge, and keep the deal from finalizing for significantly longer—or not at all—while those arguments are tested.
Microsoft’s lawyers have been broadly arguing that a single game series can’t make or break a gaming console, while Sony’s have recently stated to the UK’s competition authority that competing franchise Battlefield “cannot keep up” (opens in new tab) with Activision’s Call of Duty.
It also recently came out that Microsoft offered Sony a 10-year deal (opens in new tab) guaranteeing Call of Duty would be on PlayStation consoles. That’d give Sony an, at worst, pretty long length of runway to develop a proper Call of Duty competitor itself—but Sony hasn’t had much to say publicly about that.
You can read the full report on the possibility of an FTC lawsuit on Politico. (opens in new tab)