Breaking: Bill Gates Receives Devastating Blow From Federal Trade Commission, “Today We Seek To Stop Microsoft From Gaining Control Over… “

CNBC

Disclaimer: This article may contain the personal views and opinions of the author.

The Federal Trade Commission was created in 1914 with the mission to protect the public from unfair or deceptive business practices. It also seeks to limit unfair methods of competition. 

Microsoft Corporation reached an agreement earlier this year to acquire video game publisher Activision Blizzard for nearly $69 billion dollars. 

It’s the largest-ever deal in the video gaming industry. The FTC is alleging that the deal would allow Microsoft to suppress its competitors.

Microsoft owns Xbox gaming systems, subscription content, and cloud gaming. This deal, the FTC feels, would crush their competition. 

“Microsoft has already shown that it can and will withhold content from its gaming rivals,” said Holly Vedova, Director of the FTC’s Bureau of Competition. “Today we seek to stop Microsoft from gaining control over a leading independent game studio and using it to harm competition in multiple dynamic and fast-growing gaming markets.”

In a statement, the FTC said, “In a complaint issued today, the FTC pointed to Microsoft’s record of acquiring and using valuable gaming content to suppress competition from rival consoles, including its acquisition of ZeniMax, parent company of Bethesda Softworks (a well-known game developer). 

“Microsoft decided to make several of Bethesda’s titles including Starfield and Redfall Microsoft exclusives despite assurances it had given to European antitrust authorities that it had no incentive to withhold games from rival consoles.

“Microsoft’s Xbox Series S and Series X are one of only two types of high-performance video game consoles. 

“Importantly, Microsoft also offers a leading video game content subscription service called Xbox Game Pass, as well as a cutting-edge cloud-based video game streaming service, according to the complaint.

“Activision is one of only a very small number of top video game developers in the world that create and publish high-quality video games for multiple devices, including video game consoles, PCs, and mobile devices. 

“It produces some of the most iconic and popular video game titles, including Call of Duty, World of Warcraft, Diablo, and Overwatch, and has a combined 154 million monthly active users around the world, according to the FTC’s complaint. 

“Activision currently has a strategy of offering its games on many devices regardless of producer.”

If this deal is allowed to close, everything could change for Activision. With Microsoft in control, they would have the “means and motive to harm competition” because they could manipulate pricing. 

They could also change the game quality and the player experience for rival consoles making it inferior to the Xbox experience. They would also have the ability to change the terms and access to Activision’s content which would be harmful to consumers of rival game consoles. 

Three out of four members of the Commission voted to issue the complaint against Microsoft. 

It issues complaints of this nature when it has reason to believe that there is a potential violation of the law and when it is in the best interest of the public. 

Will the FTC be successful in blocking the acquisition? This would be another in a list of mergers blocked by the Commission since FTC chair Lina Khan took the position in June 2021.