The worst thing that could happen to Microsoft’s Xbox Activision deal is about to take place. The Federal Trade Commission is preparing to legally challenge the acquisition and could file a lawsuit against Microsoft as early as next month. According to Politico, both Microsoft’s CEO Satya Nadella and Activision’s CEO Bobby Kotick have already been deposed but the FTC still has issues with the deal.
According to the report, the FTC now has to wait for its commissioners’ vote before it can file the lawsuit. If the vote does come through, the Xbox Activision deal will face major antitrust challenges in multiple regions including the US, UK, and EU. This is after Microsoft has struggled to reassure regulators that its purchase of Activision won’t hurt the competition in the gaming industry.
Activision claims that the company is ready to fight the FTC should the commission file the lawsuit. In a statement, the company says it is committed to cooperating with regulators around the world:
“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. 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.”
Microsoft and Activision originally hoped that the deal would be signed and ready to complete by July 2023. However, should the FTC file its lawsuit, this could further delay the completion or worse, deny it completely. The deal has also been the talk of the industry this year after reports came out that Microsoft offered Sony a 10-year deal for Call of Duty in exchange for overlooking the sale issues.
Things also got nasty when Microsoft accused Sony of paying developers to keep games off Xbox Game Pass. Sony stated this week that Microsoft’s plan is to move everyone over to Xbox before increasing the prices of its console and subscription services.
We will share more news if and when the FTC files its lawsuit. It will mark a substantial move for this deal.