FTC Is Still Trying To Block The Xbox And Activision Merger

Master Chief, Ghost, Tracer, and Tiffi are shown behind text that reads Xbox + Activision Blizzard King.

Image: Microsoft

Just when we thought Microsoft’s Activision acquisition was finally set in stone two months ago, it looks like the Federal Trade Commission has made another appeal to block Master Chief and John Call of Duty’s marriage.

Reuters’ story on the situation says the FTC lawyer Imad Abyad argued in front of a three-judge appeals court panel in California on Wednesday, December 6, that original attempts to block the deal were held to “too high a standard” by requiring the government agency to prove the deal was anti-competitive. According to Abyad, the inherent monopoly risk that comes with giant corporations buying each other should be apparent, and Microsoft has already kept Bethesda’s games like Redfall and Starfield exclusive to PC and Xbox after its acquisition in 2021. But that wasn’t enough to stop the deal from going through in the EU and Britain.

“I fail to understand how giving somebody a monopoly of something would be pro-competitive,” Abyad said during the hearing, according to CNN. “It may be a benefit to some class of consumers, but that is very different than saying it is pro-competitive.”

Microsoft lawyer Rakesh Kilaru argued that the case was “weak” and that the FTC hadn’t adequately proven that Microsoft had any incentive to make games like Call of Duty exclusive. Reuters says the judges questioned both attorneys, as well as Abyad’s claims that there was more evidence to look over after Microsoft had entered agreements with Sony to keep Call of Duty on PlayStation platforms.

Two antitrust scholars who listened to the appeal and spoke to Reuters said the FTC would be facing an uphill battle in this last-ditch effort to block the merger, with former FTC general counsel Alden Abbott comparing the FTC’s case to accusing a court of ignoring key evidence presented by a witness.

I gotta say, it would be deeply funny if Microsoft had to walk back its terrible merger celebration video, like the big business equivalent of having to change your Facebook relationship status mere months after you changed it to “Married.”However, given that other territories have signed off on the acquisition, I have a hard time seeing this appeal being the one that finally cuts it off at the knees. The deal was originally announced in 2022 and has become a key discussion point in the video game industry’s continued consolidation, as Microsoft has been throwing a lot of money around to grow its first-party studios. The acquisition has longtime Activision CEO Bobby Kotick, who was a key figure in the company’s 2021 workplace harassment scandal, leaving his position in 2024.

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