FTC plans to ask court to block Microsoft-Activision Blizzard deal

A person familiar with the matter said the US Federal Trade Commission is expected to seek to block Microsoft’s $75bn acquisition of Activision Blizzard, putting pressure on the gaming industry’s biggest ever deal.

The antitrust watchdog sued last year to block the transaction through its in-house court proceedings, which are set to begin in August. But it is now expected to file a separate request in federal court, in a move that could prevent Microsoft from closing the deal before a decision is made. It is more difficult to challenge a deal once it is done.

FTC and Activision, makers of the blockbuster game Duty The series declined to comment. Brad Smith, vice president and president of Microsoft, said: “We welcome the opportunity to present our case in federal court. We believe that expediting the legal process in the US will ultimately lead to more choice and competition in the marketplace.

The regulator’s move against Microsoft’s deal is being seen as one of the most high-profile challenges brought by Joe Biden’s administration. The President appointed a group of progressive antitrust officials eager to learn about anti-competitive conduct in the US economy, including FTC Chairwoman Leena Khan.

The UK’s Competition and Markets Authority ruled in April to block the deal, putting the acquisition in serious jeopardy. The CMA argued that Microsoft could make Activision’s games exclusive to its own cloud gaming service.

Activision said the CMA’s decision “contradicts the UK’s ambitions to become an attractive country to build technology businesses”. Microsoft’s Smith said his group “remains fully committed to this acquisition and will appeal”.

In a break from the UK and US, the European Union approved the acquisition last month and said Microsoft had accepted its concerns.

In an interview with the FT in February, Activision chief executive Bobby Kotick complained that “ideologues” who believed that “bigger is bad” were taking over competing executives.

Activision was surprised by the FTC’s decision in December to sue to block the deal, he said, because “no one would have expected ideology to get in the way of opportunity”.

The FTC’s treatment of the deal intensified concerns in corporate America that Khan was ushering in a more anti-interventionist policy. Suzanne Clark, chief executive of the US Chamber of Commerce, cited the agency earlier this year as an example of “unprecedented regulatory over-reach,” which she promised the business lobby would fight in court.