Acquisition of Activision Blizzard by Microsoft

Background

History

Announcement

Regulatory response

Country	Commission	Status	Date
Saudi ArabiaInterlanguage link|General Authority for Competition |lt=General Authority for Competition|ar|الهيئة العامة للمنافسة U.S. Federal Trade Commission (FTC) In the United States, the acquisition was reviewed by the Federal Trade Commission rather than traditionally by the U.S. Department of Justice, as the agency had raised more concerns over mergers and acquisitions in the Big Tech sector in the last decade. U.S. Senators Elizabeth Warren, Bernie Sanders, Sheldon Whitehouse, and Cory Booker expressed their concerns about the merger to the FTC as part of the FTC's investigation, saying that both companies have "failed to protect the rights and dignity of their workers" and that the merger should be opposed if "the transaction is likely to enhance monopoly power and worsen the negotiating position between workers and the parties." The FTC formally stated its intention to block the acquisition as proposed on December 8, 2022. The FTC expressed concern that the acquisition would harm consumers of Activision Blizzard's games and give Microsoft too much control of certain parts of the industry, such as cloud gaming. The FTC also pointed to the acquisition of Zenimax, which the FTC claimed that Microsoft had agreed to a concession from the European Union to not make their games exclusive to the Xbox and later broke. In a statement made to Axios' Stephan Totilo, the European Commission stated that they had cleared Microsoft's acquisition of Zenimax unconditionally as they saw no "material impact" on the gaming market even if Microsoft made Zenimax's titles exclusive. Microsoft responded to the FTC's complaint that Sony itself is one of the largest platforms with exclusive titles that contractually cannot be made for Xbox. They also said they still plan to offer content for multiplayer Bethesda games like Elder Scrolls Online and Fallout 76 for all platforms to avoid undercutting the playerbase. Microsoft also initially challenged the constitutionality of the FTC due to the ability for the Commissioner to be removed by the President at will, and their use of administrative law judges to initially review cases, both which have founding in recent Supreme Court cases, but removed this language in an amended response, sticking to the video game market. In February 2023, the FTC denied a request by Sony to drop a subpoena filed by Microsoft, requesting internal documentation from Sony related to their third-party exclusivity deals. The FTC requested a temporary restraining order and a preliminary injunction to block the merger on June 12, 2023. The FTC stated that Microsoft and Activision Blizzard "have represented in the past that they cannot close their deal due to antitrust reviews of the transaction in other jurisdictions. But Microsoft and Activision have not provided assurances that they will maintain that position." The court granted the temporary restraining order on June 13, 2023, while a hearing to determine if a preliminary injunction on the deal should be granted was held from June 22 to 30, 2023, before Judge Jacqueline Scott Corley. Microsoft said that if the injunction should be granted, they may consider abandoning the deal which they described as being a "three-year administrative nightmare". During the hearing, the FTC was focused on the effect of Call of Duty in the competitive market, console exclusivity, and the impact of the nascent cloud gaming field. Judge Corley denied to apply a permanent injunction on July 11, 2023, lifting the temporary restraining order to allow Microsoft to proceed to close the deal, though the case will continue to trial later. Corley wrote, "For the reasons explained, the Court finds the FTC has not shown a likelihood it will prevail on its claim this particular vertical merger in this specific industry may substantially lessen competition. To the contrary, the record evidence points to more consumer access to Call of Duty and other Activision content." The FTC formally filed an appeal to Judge Corley's denial to the Court of Appeals for the Ninth Circuit on July 12, 2023. The FTC also filed a separate motion to Corley on July 13 arguing for another injunction until the Ninth Circuit had time to decide to stay Corley's previous ruling, but she denied that motion. The Ninth Circuit court denied the emergency appeal to block the merger on July 14, 2023. The FTC formally withdrew its challenge to the acquisition on July 20, 2023, though they have announced their intent to refile at a later time. The FTC reopened its case against the merger on September 27, 2023, though was unable to block the merger from occurring. In its first filings after the completion of the acquisition, in February 2024, the FTC argued that the 1,900 job cuts made in January 2024 went against assurances that Microsoft had made in their previous documents, arguing for final completion of the deal to be paused while their new complaint was considered. While Microsoft had stated that the job cuts were in areas of overlap between the companies, the FTC stated this action was "inconsistent with Microsoft's suggestion to this court that the two companies will operate independently post-merger". The FTC further amended its case in July 2024, following Microsoft's announcement of rate increases for Game Pass and the creation of a low-cost tier that removed day-one access to games. The FTC said the move was inconsistent with the assurances Microsoft gave the court prior to acquisition, and considered the new tier a "degraded product" that, along with price increases, harmed consumers. The Ninth Circuit denied the FTC's appeal in early May 2025, leading to the FTC dropping the case by May 22, 2025.