The $69 billion buyout offer from Microsoft Corp. for video game developer Activision Blizzard Inc. is likely to be challenged in court on antitrust grounds by the U.S. Federal Trade Commission (FTC).
As major international technology companies asserted their claims to a virtual future, Microsoft, the company that makes the Xbox game console, announced in January that it would purchase Activision in the largest gaming industry deal in history.
Microsoft hopes that the acquisition will improve its ability to compete with Sony and Tencent, the two top videogame developers.
According to Politico, which cited people familiar with the matter, a lawsuit contesting the transaction is not guaranteed. It added the FTC's four commissioners have yet to decide on a complaint or meet with attorneys for the companies.
"We are committed to continuing to work cooperatively with regulators around the globe to allow the transaction to proceed, but won't hesitate to fight to defend the transaction if required," an Activision Blizzard spokesperson said.
The spokeswoman continued, calling any claims that the deal may have an anticompetitive impact "completely absurd,"
The FTC's main issue is whether buying Activision would unfairly advantage Microsoft in the video game market. Microsoft's dominance over titles like "Call of Duty." has led Sony, the manufacturer of the Playstation console, to criticize the deal.
"Sony, as the industry leader, says it is worried about 'Call of Duty,' but we've said we are committed to making the same game available on the same day on both Xbox and PlayStation," Microsoft President and Vice Chair Brad Smith has said.
The FTC staff investigating the transaction is similarly skeptical of the corporations' reasons, according to the report.
The deal is also being scrutinized outside of the U.S. The EU launched a comprehensive probe earlier this month. The EU's competition regulator stated that it would decide whether to clear or ban the deal by March 23, 2023.
In September, Britain's antitrust authority announced a full-scale investigation. It asserted the acquisition might harm the industry if Microsoft refuses to offer rivals access to Activision's best-selling games.
"We are prepared to address the concerns of regulators, including the FTC, and Sony to ensure the deal closes with confidence," a representative for Microsoft said. " We'll still trail Sony and Tencent in the market after the deal closes, and together Activision and Xbox will benefit gamers and developers and make the industry more competitive."
Activision's stock fell by around 2% in after-hours trading after closing 1% higher.
