The US Federal Trade Commission blocks Microsoft/Activision deal

The reader will recall that in April I drafted a note on the UK CMA decision to block the Microsoft takeover of Activision.  About a month later, in May 2023, the EU Competition authorities took a different view and permitted the takeover with conditions.
The deal is calculated at USD69Bn.
On 12 June, the USFTC sought a temporary injunction to block the takeover. In its filing, the USFTC said the two Corporations had ‘signalled’ the deal could be executed as soon as this coming Friday (16 June).
The filing continued that, unless the court intervened, the deal would produce a corporation that had the ‘ability and increased incentive to withhold and degrade Activision’s content in ways that substantially lessen competition’.
At the heart of the FTCs concerns is that Microsoft owns Xbox and Activision owns some very big games (Call of Duty included). Any deal could exclude other platform providers. Nintendo and Sony Group Corp could be denied access to these games. Consumers would be forced to use Microsoft platforms to play Activision games. Sony have expressed concerns.
The EU based its decision to allow the merger on undertakings given by Microsoft and Activision that the games would continue to be made available to other platforms for a fixed period of time post-merger.
Many will recall the fury of Microsoft to the UK CMAs decision. The reaction of their President (Brad Smith) to the FTC filing was more polite, not to say restrained;
‘We welcome the opportunity to present our case in federal court’.
Interestingly, the US FTC has its own in-house Administrative Judge who can grant such applications. The trial at the in-house FTC court will open on 2 August.

There is no getting away from the fact that Microsoft and Activision together would have a large chunk (a technical term) of the cloud gaming market. The problem is that the deal probably requires all three regulators to agree, but it definitely needs the FTC to sign off on the deal. The questions arise, what safeguards can the parties offer? And will these safeguards be sufficient?
My own view is that the USFTC is deeply troubled by the deal. I think the FTC was rather hoping the EU would do the job of blocking the deal. Now it has been forced to act and I do not think the FTC would have sought injunctive relief were it not minded to consider blocking the deal.
The EU was satisfied with the undertakings to make games available to competitor platforms. The CMA took a different view.
If I was pressed to guess on the FTCs decision, I would say that they are likely to block the deal. The combination of these corporations would give it a dominant position in the cloud gaming market, a market of increasing importance.

Related Services

Read more from this author

  • Brighton - Jubilee St

    1 Jubilee Street


    East Sussex

    BN1 1GE

  • Brighton - Old Steine

    47 Old Steine


    East Sussex

    BN1 1NW

  • Gatwick

    Griffin House

    135 High Street


    West Sussex

    RH10 1DQ

  • Guildford

    Wonersh House

    The Guildway

    Old Portsmouth Road



    GU3 1LR

  • Hassocks

    32 Keymer Road


    West Sussex

    BN6 8AL

  • Horsham

    3rd Floor

    Afon Building

    Worthing Road


    West Sussex

    RH12 1TL

  • London

    6 New Street Square

    New Fetter Lane


    EC4A 3BF

  • Make an enquiry

    Make an enquiry


    Or head to our Contact us page