Antitrust Litigation News: Microsoft, Activision Blizzard, & the FTC

US antitrust laws are enforced by the Federal Trade Commission (FTC). These laws are in place to prevent businesses from engaging in monopolistic and anti-competitive conduct, thereby protecting consumers and the economy at large. A common example of an antitrust violation is when a branded pharmaceutical company will pay or compensate a generic drug manufacturer for delaying the release of a competing, less expensive version of the same drug to market. When a corporation violates anti-trust laws like this, consumers are harmed.

Another example of anti-competitive behavior is when two major corporations merge, thereby reducing the total number of providers of a service or product on the market, effectively creating a monopoly. In recent years, we have seen several significant mergers in the entertainment and tech industries, some of which have raised eyebrows.

Tech and entertainment companies recently the subject of antitrust investigations:

• Disney & 21^st Century Fox
• Alphabet (Google)
• Meta (Facebook)
• Amazon

Microsoft’s recent $69 billion acquisition of Activision Blizzard is another example. Keep reading to learn more about this case and the FTC’s resulting antitrust investigation.

Potential Suppression of Competition

With the acquisition of Activision Blizzard (the owners of the popular “Call of Duty” and “candy Crush” franchises), Microsoft is poised to become one of the top three gaming companies in the world (after Tencent and Sony). This acquisition is highly attractive to Microsoft as it will give them a leg up in the burgeoning mobile and cloud gaming industries.

The size alone of this acquisition has caused the FTC to take notice, as it has been cited as completely changing the dynamic of the gaming industry. The $69 billion acquisition is the largest Microsoft has ever made and the largest in the gaming industry.

As of December 8^th, the FTC is seeking to block the acquisition, arguing that it will “suppress competitors to [Microsoft’s] Xbox gaming consoles and its rapidly growing subscription content and cloud-gaming business.” The FTC has also noted that Microsoft has a history of acquiring gaming content as a means to suppress competition, such as through their acquisition of Bethesda Softworks, after which they made several of Bethesda’s gaming titles exclusive to Xbox. Because Activision Blizzard is one of the few major game developers that produce high-quality cross-platform games, Microsoft’s track record is a major red flag for the FTC.

Why Antitrust Litigation Is Important

As can be seen with Microsoft’s attempt to acquire Activision Blizzard, antitrust laws and antitrust litigation are incredibly important for keeping major corporations in check. These corporations are in business to make money – this is their primary goal. Consequently, when they see an opportunity to get ahead, such as Microsoft has with this acquisition, they will take it. Unfortunately, in some instances, as may be the case here, these opportunities violate antitrust laws and harm consumers.

In some cases, large mergers and acquisitions like this aren’t problematic or can be structured in a way that doesn’t hurt competition and protects consumers. For example, while the Disney-Fox merger raised a lot of questions, it was ultimately allowed to proceed after a settlement was reached with the FTC in which Disney was required to divest itself of 22 of Fox’s regional sports networks.

At Golomb Legal., we have been taking on antitrust litigation cases for decades and have recovered over $2 billion in settlements and verdicts. With experience in both class-action and individual lawsuits, we have seen first-hand how vitally important antitrust laws are to the US economy and how harmful violations can be to consumers.