The deal between Microsoft and Activision Blizzard is already facing an in-depth phase 2 investigation by the European Commission and the FTC lawsuit, if confirmed, could create more hurdles for its closing
The US Federal Trade Commission (FTC) could reportedly file a lawsuit to block the previously announced Microsoft’s $68.7bn acquisition of US-based video game holding firm Activision Blizzard.
A lawsuit contesting the deal is not certain, and the regulator’s four commissioners are yet to vote out a complaint, reported Politico, citing two undisclosed sources having knowledge about the matter.
The FTC staff, who are examining the acquisition, are not convinced of the arguments of the companies, as per the sources.
The main concern of the regulator is said to be if the proposed merger would give Microsoft an unfair advantage in the market for video gaming.
Activision Blizzard spokesperson Joe Christinat, has been quoted by Politico, as saying: “Any suggestion that the transaction could lead to anticomp effects is completely absurd. This merger will benefit gamers and the US gaming industry, especially as we face increasingly stiff competition from abroad.
“We are committed to continuing to work cooperatively with regulators around the globe to allow the transaction to proceed, but will not hesitate to fight to defend the transaction if required.”
Microsoft and Activision Blizzard could potentially scrap the transaction if the regulator files a lawsuit later this year or in January 2023, which would be unlikely to be resolved by the expected deal closing date of July 2023, wrote the news organisation.
Recently, the European Commission (EC) launched an in-depth phase 2 investigation into the deal.
According to the EC, the acquisition would lead to increased prices, lower quality, and less innovation for distributors of console games which could eventually affect the consumers.
The Commission is expected to take a decision on the proposed deal by 23 March 2023.