The multi-billion dollar purchase of Activision-Blizzard by Microsoft has run into another stern legal challenge, but this time it isn’t coming from the Federal Trade Commission; it’s coming from a group of 10 self-described gamers who have filed a federal antitrust lawsuit against Microsoft over worries that the merger will create a gaming monopoly.
The suit specifically cites Section 7 of the Clayton Antitrust Act of 1914 as cause for the filing, which is meant to limit acquisitions that significantly stop competition or create a monopoly. The plaintiffs in the case argue that the purchase “would give Microsoft an unrivaled position in the gaming industry, leaving it with the greatest number of must-have games and iconic franchises.”
The filing further tries to bolster reasons for this concern by referencing earlier suggestions that Microsoft would block access to the Call of Duty franchise on other platforms, highlighting exclusivity deals between Bethesda and Microsoft after a $7.5B buyout of ZeniMax Media, citing studies that claim 46% of PlayStation and Nintendo users in the US would subscribe to Xbox Game Pass if the merger goes through, and arguing that players of online games like to join with their friends on the same platform to play together.
“The current trend toward concentration, the lessening of competition, and the tendency to create a monopoly in the video game industry was already harming competition at an alarming rate before the proposed acquisition was announced. […] If Microsoft’s proposed acquisition of Activision-Blizzard is allowed to proceed, the video game industry may lose substantial competition, and Microsoft may have far-outsized market power, with the ability to foreclose rivals, limit output, reduce consumer choice, raise prices, and further inhibit competition.”
A statement from Microsoft defends the business deal, claiming that the merger “will expand competition and create more opportunities for gamers and game developers as [Microsoft seeks] to bring more games to more people.”
We do feel the need to point out that in spite of its myriad arguments, the suit does veer into hyperbole and is very largely an unnecessary sideshow. All the same, it is at the very least another page in this very weird saga.
