The US Federal Trade Commission (FTC) is likely to file an antitrust lawsuit to block Microsoft’s bid for a $69 billion takeover of video game publisher Activision Blizzard, Politico reported Wednesday, citing people familiar with the matter.
A lawsuit challenging the deal is not guaranteed, and The four FTC commissioners have yet to vote on a complaint or meet with attorneys for the companies, the report said, adding that FTC staffers reviewing the deal are skeptical of the companies’ arguments.
The FTC did not immediately respond to requests for comment from Reuters.
“We are committed to continuing to work collaboratively with regulators around the world to allow the transaction to move forward, but we will not hesitate to fight to defend the transaction if necessary,” said an Activision Blizzard spokesperson. The spokesperson added that any suggestion that the deal could have anti-competitive effects is “absolutely absurd”.
Activision shares were down about 2% in extended trading, after closing up 1%.
Microsoft, the maker of the Xbox game console, announced in January a deal to buy Activision, maker of “Call of Duty” and “Candy Crush” games, in the largest gaming industry deal in history as the global tech giants staked their claims to the virtual future. .
Microsoft is betting on the acquisition to help it better compete with video game leaders Tencent and Sony.
The deal also faces scrutiny outside the United States. The European Union opened a wide-ranging investigation earlier this month. The EU competition enforcement said it would decide by March 23, 2023, whether to remove or block the deal.
Britain’s antitrust watchdog said in September it would launch a full investigation.
Britain’s antitrust watchdog said the takeover could damage the industry if Microsoft refuses to give rivals access to Activision’s best-selling games.
The deal drew criticism from Sony, the maker of the PlayStation console, is citing Microsoft’s dominance over games like Call of Duty.
“Sony, as the industry leader, says they have qualms about Call of Duty, but we said we were committed to making the same game available on the same day for both. Xbox and PlayStation,” said Microsoft President and Vice President Brad Smith.
A Microsoft spokesperson said: “We stand ready to address the concerns of regulators, including the FTC, and Sony to ensure the deal closes with confidence. We will continue to track Sony and Sony.” Tencent is in the market after the deal is concluded, and Activision and Xbox together will benefit gamers and developers and make the industry more competitive.”