July 19th 2024.
Did the FTC make the right call in the Microsoft acquisition of Activision Blizzard? It seems they are still convinced they were correct, as they continue their appeal against the purchase. In a high-profile legal battle last year, the Federal Trade Commission and Microsoft clashed over the potential consequences of the acquisition. The FTC argued that this merger would be detrimental to both the gaming industry and consumers. However, despite their efforts, the FTC ultimately lost the case. But now, they believe that history has proven them right.
The FTC has already pointed to the 1,900 job cuts that occurred shortly after the acquisition as evidence of their initial concerns. Now, they are also pointing to the recent price increase and changes to Game Pass as further proof of the "consumer harm" they warned about. Although it's unclear what actions they can take at this point, the FTC is still awaiting a judgment from the court of appeal, which they hope will strengthen their case.
In a recent announcement, Microsoft revealed their plans to revamp Xbox Game Pass. These changes include price increases and the removal of access to first-party games on the lowest tier of the subscription. It's evident that these changes are a direct result of the Activision Blizzard acquisition and the preparation for the release of Call of Duty on Game Pass. The FTC is not sitting idly by, but they have already filed a submission to the US Court of Appeals.
According to the FTC's filing, the changes made by Microsoft, such as removing the most valuable games from Game Pass and reducing investments in output and product quality through employee layoffs, are clear signs of a company exercising their market power post-merger. While the FTC has been appealing last year's judgment, it's uncertain what actions, if any, can be taken even if the courts rule in their favor.
The FTC points out that Microsoft had promised to make Call of Duty available on Game Pass on the day of its release on console, but this is no longer the case for all subscription tiers. This further supports their argument that the merger has not been beneficial for consumers. The Ninth Circuit Court of Appeals has yet to make a decision on the FTC's appeal, and it's unknown when they will do so, but it's worth noting that this recent submission may not have any impact on the court's decision.
If the court does side with the FTC, it will be a significant blow to Microsoft and could potentially harm their reputation. While it's unlikely that the Activision Blizzard acquisition will be undone, it will make future mergers and acquisitions more challenging for the company. As always, you can reach us via email, leave a comment, follow us on Twitter, and sign up for our newsletter. And for those who want to submit Inbox letters and Reader's Features more conveniently, our Submit Stuff page is now available. Don't forget to sign up for exclusive gaming content and get access to the latest releases before they're published on the site. Thank you for reading, and we value your privacy, so please refer to our Privacy Policy for more information. This site is also protected by reCAPTCHA and is subject to Google's Privacy Policy and Terms of Service.
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