FTC's case against Microsoft's proposed Activision merger to have first pre-trial hearing on Tuesday

A new report revealed that the first pre-trial hearing of the complaint filed by the Federal Trade Commission (FTC) to block Microsoft’s $69 billion Activision deal would be this Tuesday. (via Reuters)

The complaint, announced in December 2022, was pushed after the agency’s commissioners voted 3-1. In its press release announcing the decision to sue Microsoft, the FTC expressed how the merger would give the software company the power to keep Activision titles away from its competitors, which could threaten the competition in the gaming market.

“Microsoft has already shown that it can and will withhold content from its gaming rivals,” FTC Bureau of Competition Director Holly Vedova said at that time. “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.”

FTC’s argument regarding the possibility of content blocking, however, has always been countered by Microsoft through its repeated assurances and concession offerings. Earlier in December, it handed Nintendo a 10-year Call of Duty deal. It also encouraged Sony to accept the same offer and even proposed the right to put Call of Duty on its PlayStation Plus gaming subscription service. Still, the rival strangely remained unresponsive despite previously complaining about the former “inadequate” 3-year proposal it received from Microsoft.

FTC also explained in its complaint that Microsoft couldn’t be trusted due to its past actions toward the ZeniMax deal. It claimed that the company “assured” the European Commission during its antitrust review of the deal that it wouldn’t make ZeniMax titles exclusive to its gaming service but did the opposite after the purchase cleared. The European regulator, however, dismissed the claims.

The lawsuit is just one of the biggest actions of the FTC under the Biden administration, which is taking extra attention toward tech companies. However, a former antitrust expert called the complaint “nutty” due to its lack of sufficient evidence. Supporters of the deal also criticized FTC Chair Lina Khan’s op-ed tackling ‘illegal merger,’ asking her to resign from her position and saying the agency lacks knowledge about the real situation in the gaming industry. Despite all this, the FTC is determined to continue the case, even with many supporters rallying beside Microsoft and the company itself recently destroying the agency’s arguments in its recent official response.