• by Wendy Davis  @wendyndavis, December 8, 2022

The Federal Trade Commission on Thursday sued to prevent Microsoft from completing its proposed $69 billion purchase of Activision, arguing that the merger would threaten competition.

“With control of Activision’s content, Microsoft would have the ability and increased incentive to withhold or degrade Activision’s content in ways that substantially lessen competition -- including competition on product quality, price, and innovation,” the agency alleged in a complaint unveiled Thursday. “This loss of competition would likely result in significant harm to consumers in multiple markets at a pivotal time for the industry.”

Microsoft Vice President Brad Smith countered Thursday on Twitter that the company believes the merger “will expand competition and create more opportunities for gamers and game developers.”

“We have been committed since Day One to addressing competition concerns, including by offering earlier this week proposed concessions to the FTC,” Smith said in a Twitter post. “While we believe in giving peace a chance, we have complete confidence in our case and welcome the opportunity to present it in court.”

If completed, the buyout, announced in January, would add “Call of Duty" and "World of Warcraft" to Microsoft's existing lineup.

The FTC claims that Microsoft has previously acquired outside studios, then withheld those studios' titles from other consoles.

The agency's complaint will be heard by an in-house administrative judge.

The agency voted 3-1 to file the complaint, with Republican commissioner Christine Wilson dissenting.

News of the lawsuit comes several months after the FTC brought an antitrust case against Meta Platforms, in an attempt to block its purchase of virtual reality fitness app Supernatural.

That matter is currently before U.S. District Court Judge Edward Davila in San Jose, California, who is presiding over a trial that began on Thursday and is expected to conclude before the end of the year.