Microsoft/Activision Blizzard merger ‘likely’ to face FTC lawsuit

Microsoft’s chances of completing its $70 billion acquisition of Activision Blizzard look a little slimmer this week. Citing three sources familiar with the matter, Politico reports that the U.S. Federal Trade Commission (FTC) is “likely” to try to block the deal with an antitrust lawsuit.

The news comes as the deal faces tough scrutiny from U.K. and European Union regulators as well. Governments around the world are keen to rein in the power of big tech companies, and Microsoft’s gaming power move presents them with a big target. FTC chair Lina Khan has been outspoken in her opposition to potential tech monopolies.

Politico’s sources say the decision has not yet been made, but that “the FTC staff reviewing the deal are skeptical of the companies’ arguments.”

Meanwhile, the war of words between Sony and Microsoft over the deal took an absurd turn Wednesday when the U.K. regulator, the Competition and Markets Authority, released clashing statements the two companies had made to its investigators in October. Sony is pleading with regulators to block the deal, saying Microsoft controlling Activision Blizzard, and particularly the Call of Duty franchise, will kill off competition in the games market.

Both companies were put in the unusual position of being motivated to argue that their opponents are much more successful than they are, and bent over backwards to present themselves as the scrappy underdog.

“The suggestion that the incumbent market leader, Sony, with clear and enduring market power, could be foreclosed by the smallest of the three console competitors, Xbox, as a result of losing access to one title, is not credible,” Microsoft protested. (It has also strenuously denied that it would do such a thing in the first place; Microsoft gaming chief Phil Spencer said Call of Duty would remain on PlayStation “as long as there’s a PlayStation out there to ship to,” while the company said it had offered Sony a further 10 years of Call of Duty games.) Polygon