The US Federal Trade Commission or FTC has been investigating the purchase of Activision by Microsoft and it is allegedly preparing a lawsuit for December 2022.
Microsoft, a former number one tech company in the US, had acquired video game publisher Activision for its gaming division, Xbox. The company had initiated the $68.7 billion deal in January 2022 but it is not yet complete, although, both companies’ board of directors have approved it.
Already, EU and UK regulators are looking at the deal to find gaps that would let them apply antitrust laws. Meanwhile, Politico reported that the FTC has already deposed both Satya Nadella of Microsoft and Bobby Kotick of Activision.
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The companies argue that the deal would not hurt competition in the gaming space, however, many are likely to disagree. For example, Activision publishes Call of Duty, which is one of the most popular games of our times. Under Microsoft, the game could be made exclusive to its console, Xbox, making gamers who must play it favour the console over that of rivals like Sony or Nintendo. Of course, Microsoft has promised not to do so, at least not yet.
Given the recent news, Activision shareholders stand to a lot of potential money if the deal does not go through because Microsoft’s bid values the company at $95 per share (it was at $74 to $76 per share in 2021).
“We are committed to continuing to work cooperatively with regulators around the globe to allow the transaction to proceed, but won’t hesitate to fight to defend the transaction if required,” Activision spokesperson, Joe Christinat, had said about the impending lawsuit. “Any suggestion that the transaction could lead to anticompetitive effects is completely absurd. This merger will benefit gamers and the U.S. gaming industry, especially as we face increasingly stiff competition from abroad.”
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