The U.S. Federal Trade Commission will scrutinize Microsoft's proposed acquisition of scandal-plagued video gaming powerhouse Activision Blizzard.
The deal, which Microsoft hopes to complete by the end of fiscal Q4 2023, will give Microsoft control of major properties such as "Call of Duty," "Warcraft," "Starcraft," "Diablo," and "Overwatch."
Microsoft has revealed plans to continue releasing many of these games on Sony's PlayStation platform for the foreseeable future, at least as long as current contract agreements remain in place, but the potential exists for Xbox to exclude its competitor from some of the world's biggest franchises if the deal goes through.
The FTC will reportedly oversee the probe rather than the Department of Justice, which also has antitrust enforcement authority. According to Bloomberg, the study would look into whether merging Microsoft, which develops Xbox consoles, and Activision Blizzard, which makes video games, could hurt competition by limiting rivals' access to popular titles.
While both of these U.S. regulatory authorities are in charge of assessing mergers, the FTC, which is led by Lina Khan, will take the lead in this case. The FTC and the Justice Department have both promised to be tougher on big tech, but Khan has been particularly vocal in her opposition to possible monopolies.
Microsoft's acquisition isn't the only one to have been announced in the recent several weeks. Sony announced on Monday that it is acquiring Bungie, the company behind "Destiny," in a $3.6 billion deal that is subject to regulatory clearance - though the process is anticipated to be a little less onerous due to the lower size of the deal.
Large-scale acquisitions of this type have historically been safe in the entertainment industry, with moves like Discovery's acquisition of Warner Media expected to go through. However, Microsoft's involvement, as well as the frequent use of terms like metaverse, could turn this into a tech issue, prompting closer scrutiny from Khan's FTC.
Microsoft's acquisition of Activision Blizzard may be scrutinized extensively. The FTC and the Justice Department's antitrust division announced in January that they would modify merger guidance, citing the fact that U.S. industries had become more consolidated in recent years and that a boom in merger filings in 2020 and 2021 threatened to exacerbate the situation.
Khan has also stated that enforcing antitrust laws in digital markets necessitates a different view, and he has suggested that the agency consider whether antitrust violations can harm workers and other businesses, a departure from the traditional view that antitrust enforcement is solely focused on consumer harms.
