Microsoft prepares to go to battle with FTC over Activision deal

American tech giant Microsoft has signaled it plans to challenge the Federal Trade Commission’s (FTC) lawsuit to block its $75 billion deal for Activision Blizzard, and is speculated to argue that it is an underdog in videogame developing.

Satya Nadella led personal- computing firm has been publicising its position for months, saying the acquisition wouldn’t threaten competition in the industry because Microsoft trails rivals such as Sony in videogame consoles and has a limited presence in mobile-game development. The company has also said it expects the industry to get more competitive in the future with the rise of cloud gaming.

Legal experts say Microsoft will likely build its case around those points as well as the fact that it is pursuing what is called a vertical merger, meaning it is buying a company in its supply chain as opposed to a direct competitor. Microsoft has until Thursday to respond to the FTC’s suit, which was filed December 8 in the administrative court.

In its complaint, the FTC alleged the deal is illegal because it would give Microsoft the ability to control how consumers access Activision’s games beyond the Redmond, Wash, company’s own Xbox consoles and subscription services. 

The company could raise prices or degrade Activision’s content for people who don’t use its hardware to access the developer’s games, or even cut off access to the games entirely, the FTC said.

Microsoft said it made a last-minute offer to keep Call of Duty games accessible to others through a legally binding consent decree, an offer that the company had made to keep it accessible for 10 years.