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FTC 'Likely' to Challenge Microsoft's $68.7B Activision Deal, Report Says

Politico reported late Wednesday that the US regulator is likely to file an antitrust suit against Microsoft's blockbuster video game deal.

Ian Sherr Contributor and Former Editor at Large / News
Ian Sherr (he/him/his) grew up in the San Francisco Bay Area, so he's always had a connection to the tech world. As an editor at large at CNET, he wrote about Apple, Microsoft, VR, video games and internet troubles. Aside from writing, he tinkers with tech at home, is a longtime fencer -- the kind with swords -- and began woodworking during the pandemic.
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Ian Sherr
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The logos of Microsoft and Activision

Microsoft announced its plans to buy game maker Activision Blizzard in January.

 Getty images

Microsoft's blockbuster $68.7 billion purchase of game maker Activision Blizzard may face a new regulatory hurdle, with a report from Politico saying the US Federal Trade Commission is "likely" to file an antitrust suit against the deal.

The story, which was published late Wednesday citing anonymous sources, said the FTC's commissioners had not yet voted on whether to file suit against Microsoft. But, the publication added, the FTC's staff are "skeptical" about each company's claims of benefits from the deal. An investigation into the deal is reportedly ongoing. 

The FTC declined to comment. A Microsoft spokesperson said the company is "prepared to address the concerns of regulators." Microsoft has said in the past that it believes the deal will be approved both in the US and overseas. An Activision spokesperson defended the deal, saying in a statement that it will "benefit gamers and the U.S. gaming industry, especially as we face increasingly stiff competition from abroad." 

If the FTC does ultimately challenge Microsoft's deal, it'll be the biggest move made by President Joe Biden's administration against the tech industry. FTC Chair Lina Kahn has long expressed interest in reining in tech's largest companies, which have grown to become some of the largest and most highly valued on the planet. And she's not alone.

Regulators and lawmakers across the globe have increasingly scrutinized the tech world, following a series of privacy and political scandals at Facebook and Google in particular. Amazon has also been targeted as one of the world's largest retailers, while Apple's been criticized for the power it wields over the more than 1 billion actively used iPhones.

Microsoft has largely avoided scrutiny lately, despite a US judge famously declaring it a monopolist two decades ago. The company's executives have spent the past year discussing the Activision deal with regulators around the world, who've received concerns from competitors including Sony's PlayStation division.

Even if the FTC does ultimately challenge Microsoft's deal, it may not win in court. Longtime video game industry analyst Michael Pachter, of Wedbush Securities, responded to the story, saying he expects that the regulator would be "crushed in court" and that likely it'll strike an agreement with Microsoft "to maintain the status quo."