The first pre-trial hearing between Microsoft and the Federal Trade Commission has been scheduled by a federal court (FTC). On January 3rd, the two will square off in court over the fate of Microsoft’s $69 billion plan to acquire Call of Duty publisher Activision Blizzard. Microsoft and Activision announced a merger in early 2022. At the time, the tech titan stated that the transaction would be completed by June 2023. The FTC sued Microsoft last month to prevent the trade from proceeding.
“Microsoft has already shown that it can and will withhold content from its gaming rivals,” noted FTC Director Holly Vedova at the time. “Today we seek to stop Microsoft from gaining control over a leading independent game studio and using it to harm competition in multiple dynamic and fast-growing gaming markets.”
The FTC will confront an uphill struggle in convincing a judge of the merits of its case. For one thing, Microsoft isn’t lobbying for a “horizontal” merger that would eliminate one of its immediate competitors. Furthermore, the corporation has indicated that it is willing to make sacrifices in order to seal the deal. If the value goes through, Microsoft has committed to releasing future Call of Duty games on competing platforms for at least ten years. It also stated that the franchise would be brought to Nintendo systems.
“The commission cannot meet its burden of showing that the transaction would leave consumers worse off, because the transaction will allow consumers to play Activision’s games on new platforms and access them in new and more affordable ways,” Microsoft argued in a legal filing last month. The proposed merger is also being investigated by the United Kingdom’s Competition and Markets Authority, which recently stated that it would launch an “in-depth” examination.
