FTC likely to file suit to block Microsoft’s bid for Activision -Politico

Nov 23 (Reuters) – The U.S. Federal Trade Commission (FTC) is likely to file an antitrust case to block Microsoft Corp’s ( MSFT.O ) $69 billion takeover bid for video game publisher Activision Blizzard Inc ( ATVI.O ), Politico reported on Wednesday citing people familiar with the matter.

A lawsuit challenging the deal is not guaranteed, and the FTC’s four commissioners have yet to vote on a complaint or meet with lawyers for the companies, the report said, adding that FTC staff reviewing the deal are skeptical of the companies’ arguments.

The FTC did not immediately respond to requests for comment from Reuters.

“We are committed to continuing to work with regulators around the globe to allow the transaction to proceed, but we will not hesitate to fight to defend the transaction if necessary,” an Activision Blizzard spokesperson said. Any suggestion that the transaction could lead to anti-competitive effects is “completely absurd,” the spokesman added.

Shares of Activision fell about 2% in extended trading after closing 1% higher.

Microsoft, the maker of the Xbox game console, announced in January the deal to buy Activision, the maker of “Call of Duty” and “Candy Crush” games, in the biggest game industry deal in history, as global tech giants staked their claim on a virtual future.

Microsoft is banking on the acquisition to help it better compete with video game leaders Tencent ( 0700.HK ) and Sony ( 6758.T ).

The agreement is also under review outside the United States. The EU launched a full-scale investigation earlier this month. The EU competition watchdog said it will decide by March 23, 2023 whether to approve or block the deal.

Britain’s antitrust watchdog said in September it would launch a full-scale investigation.

The acquisition could hurt the industry if Microsoft refused to give competitors access to Activision’s best-selling games, Britain’s antitrust watchdog has said.

The deal has drawn criticism from Sony, maker of the Playstation console, citing Microsoft’s control over games such as “Call of Duty”.

“Sony, as an industry leader, says it is concerned about ‘Call of Duty,’ but we have said we are committed to making the same game available on the same day on both Xbox and PlayStation,” Microsoft president and vice chairman Brad Smith has said.

A Microsoft spokesperson said: “We are prepared to address the concerns of regulators, including the FTC, and Sony to ensure the deal closes in confidence. We will still follow Sony and Tencent to market after the deal closes, and together with Activision and Xbox will benefit gamers and developers and make the industry more competitive.”

Reporting by Tiyashi Dattaa and Mrinmay Dey in Bengaluru; Editing by Sriraj Kalluvila and Leslie Adler

Our standards: Thomson Reuters Trust Principles.

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