Microsoft tells judges its $69 billion Activision deal would benefit gamers

6:29 am Friday, December 23rd, 2022

By Paresh Dave

(Reuters) -Microsoft Corp said on Thursday its $69 billion bid to buy “Call of Duty” maker Activision Blizzard would benefit gamers and gaming companies alike.

Microsoft made the argument in a filing aimed at convincing a judge at the U.S. Federal Trade Commission to allow the deal to proceed, after FTC commissioners said the merger would hamper competition in the gaming industry in a complaint this month aimed at blocking the deal.

In a complaint on Dec. 8, the FTC said its concern was that Activision’s popular games, including “World of Warcraft” and “Diablo,” potentially would stop being offered on devices that rival Microsoft’s Xbox. It set a hearing before an administrative law judge for August 2023.

Microsoft President Brad Smith said in mid-December the company had offered to sign a legally-binding consent decree with the FTC to provide “Call of Duty” games to rivals including Sony and others for a decade.

“The acquisition of a single game by the third-place console manufacturer cannot upend a highly competitive industry. That is particularly so when the manufacturer has made clear it will not withhold the game,” Microsoft said in Thursday’s filing.

Smith said in a statement this week he was still confident in the company’s legal case but remained “committed to creative solutions with regulators.”

Activision CEO Bobby Kotick said in a statement on Thursday he believes that the companies will prevail in a legal fight with the trade commission.

The Biden administration has taken a more aggressive approach to antitrust enforcement. The U.S. Department of Justice recently stopped a $2.2 billion merger of Penguin Random House, the world’s largest book publisher, and smaller U.S. rival Simon & Schuster.

The Microsoft deal is also facing scrutiny outside the United States, with the European Union saying it would decide by March 23, 2023, whether to clear or block the deal.

(Reporting by Diane Bartz and Paresh Dave; Editing by Muralikumar Anantharaman and Tom Hogue)