Microsoft faces new lawsuit filed by gamers aiming to stop the $69B Activision merger

Microsoft has another legal battle to handle in order to win its proposed $69 billion Activision merger deal. A new Bloomberg Law report revealed that a group of gamers filed a lawsuit in the US District Court for the Northern District of California on Tuesday. It names Microsoft as the sole defendant of the suit, stressing the perspective that the merger will give the Redmond company the vast power “to foreclose rivals, limit output, reduce consumer choice, raise prices, and further inhibit competition” in different sections of the gaming industry.

The federal antitrust lawsuit specifically mentions that this influence will cover the console, PC, cloud-based, and mobile gaming markets, in addition to more power over AAA game and subscription service competition.

“Microsoft already controls one of the industry’s most popular and largest video game ecosystems,” the suit states. “The proposed acquisition would give Microsoft an unrivaled position in the gaming industry, leaving it with the greatest number of must-have games and iconic franchises.”

The complaint also stresses the size of Microsoft and Activision gaming divisions that are products of the companies’ merger deals in the past, describing them as “a dramatic wave of consolidation” due to a “long history of concentration” in the gaming markets.

The lawsuit also underscores that Microsoft and Activision are just two of the few influential companies tussling for video game creation professionals with “specialized talent.”

In light of this new complaint, Microsoft expressed its stand on why it is continuously pushing for the deal. In a recent statement to Bloomberg Law, a company spokesperson stated that the “deal will expand competition and create more opportunities for gamers and game developers as we seek to bring more games to more people,” as opposed to the claims of the complaining group of gamers.

The gamers are represented by Alioto Law Firm, Alioto Legal, and Joseph Saveri Law Firm LLP, with the latter also handling the class-action copyright infringement lawsuit against Copilot involving Microsoft, OpenAI, and GitHub.

The lawsuit by the gamers aims to stop the merger, which is the same objective of the suit the US Federal Trade Commission filed weeks ago. In its filing, the agency explains how Microsoft couldn’t be trusted due to its past anti-competitive actions after closing its ZeniMax deal. It explicitly claims that the company made assurances to the European Commission that it would not keep away the ZeniMax titles from its rivals but decided to do the opposite after getting approval from the regulator and clearing the merger. The European watchdog, however, clarified that Microsoft didn’t make “commitments.”

Aside from these two complaints, a Swedish National Pension System reserve funds holding Activision stock, Sjunde AP-Fonden or AP7, was also reported to file a suit against the merger. The lawsuit claims that the “hastily negotiated” underpriced deal was pushed to protect Activision Blizzard CEO Bobby Kotick from the liability caused by the “frat house” culture he allowed for years in the company. It also explains that Microsoft took advantage of Activision’s “weak and wounded” condition, giving it a deal “at a bargain price.”