Private video game consumers Tuesday filed an antitrust lawsuit against Microsoft alleging the company’s intended purchase of Activision Blizzard, Inc., the maker of popular video game “Call of Duty,” for $68.7 billion creates a monopoly within the video game industry. Specifically, the lawsuit alleges that Microsoft violated Section 7 of the Clayton Antitrust Act (15 U.S.C. § 18), which “prohibits mergers and acquisitions where the effect ‘may be substantially to lessen competition, or to tend to create a monopoly.'”
Earlier this month, the Federal Trade Commission (FTC) issued a complaint in which the FTC sought to block Microsoft from acquiring Activision Blizzard in “Microsoft’s largest [deal] ever and the largest ever in the video gaming industry.” The FTC reasoned that Microsoft’s acquisition of Activision Blizzard would allow Microsoft to “substantially lessen competition,” which would result in significant harm to consumers within various markets and create a monopoly. The FTC’s Bureau of Competition Director Holly Vedova stated that the FTC “seeks 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.”
Last week, Microsoft President Brad Smith told Bloomberg that Microsoft is preparing to commit contractually or under a consent decree under “comparable terms” to ensure access for competing gaming companies like Sony. Smith also shared that the FTC blocked the acquisition without the opportunity to meet and discuss prior regarding Microsoft’s proposed consent decree.
Sony filed a complaint in October 2022 with UK competition regulator the Competition and Markets Authority, which published a report detailing the agency’s concern about a resulting decrease in current or future market competition. Microsoft’s response asserts that “[t]he Merger is fundamentally pro-competitive” because it challenges Sony’s longtime domination of the market.