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TechnologyUnited States of America

US regulator keen to halt Microsoft takeover of Activision

June 13, 2023

Microsoft has been fighting to close a deal to buy "Call of Duty" game maker Activision for $69 billion, but has faced worldwide scrutiny over concerns that the deal could stifle competition in cloud gaming.

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The Federal Trade Commission sued Microsoft last year over the deal, but brought the case to the regulator's in-house judge Image: Dado Ruvic/Illustration/REUTERS

The US Federal Trade Commission (FTC) on Monday made its move to block Microsoft from closing a massive deal to buy video game maker Activision Blizzard.

The US regulator applied for a preliminary injunction saying it was "necessary to... prevent interim harm."

The FTC would take the time to determine whether "the proposed acquisition violates US antitrust law." 

The lawsuit, filed in a San Francisco federal court, comes before the deal's July 18 deadline.

"We welcome the opportunity to present our case in federal court," said Brad Smith, president of Microsoft.

"We believe accelerating the legal process in the US will ultimately bring more choice and competition to the market," he said.

Big Tech struggling from China to Silicon Valley

What is the megadeal?

Microsoft last year announced plans to acquire "Call of Duty" maker Activision for nearly $69 billion (€64.1 billion). The acquisition would be the largest ever in the tech company's history.

The technology corporation, however, has faced intense scrutiny worldwide since announcing the proposed merger. 

The FTC filed an antitrust case against Microsoft in December last year in an attempt to rein in Big Tech.

UK concern

UK regulators blocked the acquisition earlier this April, saying it was worried that it would stifle competition in the fast-growing cloud gaming market.

The UK's Competition and Markets Authority said in the final report that the only remedy to the substantial loss of competition is "to prohibit the Merger."

Cloud gaming involves streaming games to tablets, phones and other devices, so gamers don't need to buy expensive consoles and computers. 

The European Union greenlit the deal in May.

Microsoft, the maker of the Xbox console, earns billions of dollars in gaming revenue every year. Activision is the maker of games such as "Call of Duty," "World of Warcraft" and Candy Crush.

Microsoft already has a strong position in the cloud computing market and regulators worry that a proposed merger would reinforce the company's advantage by giving it control of key game titles.

rm/jsi (AP, AFP)