Microsoft’s bid to acquire video game publisher Activision Blizzard could reportedly hit a major roadblock as early as next month.
US Federal Trade Commission (FTC) is likely to file an antitrust lawsuit to block the $69 billion takeover, according to Politico, citing people familiar with the matter.
A lawsuit challenging the deal is not guaranteed, and the FTC’s four commissioners have yet to vote on a complaint or meet with lawyers for the companies.
FTC officials reviewing the deal are skeptical of the companies’ arguments, these people said.
At the center of the FTC’s concerns is whether the Activision acquisition would give Microsoft an unfair boost in the video game market.
Microsoft’s Xbox is number three behind industry leader Sony Interactive Entertainment and its PlayStation console.
Sony is worried that if Microsoft makes hit games like Call of Duty exclusive to its platforms, Sony will be significantly harmed.
“Any suggestion that the transaction could lead to anti-bundling effects is completely absurd. This merger will benefit gamers and the gaming industry in the US, especially as we face increasingly strong competition from abroad,” Activision spokesperson Joe Christina told Politico.
SActivision Rabbits fell about 4% in extended trade.
Microsoft announced the deal in January, in the largest gaming industry deal in history.
Microsoft spokesman David Cuddy told Politico that the company “is prepared to address the concerns of regulators, including the FTC, and Sony to ensure that the deal closes with confidence.” We will still be following 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.”
FOX Business has reached out to Microsoft and Activision for further comment.
The EU launched a full-scale investigation earlier this month. The EU’s competition watchdog said it would decide by March 23, 2023 whether to allow or block the deal.