On Tuesday, a group of gamers challenged Microsoft’s proposed $68.7 billion acquisition of “Call of Duty” creator Activision Blizzard Inc. in court, arguing that the purchase will unlawfully stifle competition in the video game industry.
Less than two weeks after the FTC filed suit to prohibit the merger between Activision Blizzard, one of the world’s leading video game publishers, and Microsoft, the maker of the Xbox platform, San Francisco saw the filing of a federal antitrust case.
Ten video game gamers from the states of California, New Mexico, and New Jersey filed the private action.
The gamers are asking the court to do the same thing as the FTC and prevent the corporations from completing the merger, annul the break-up fee, and pay the gamers’ legal fees.
According to the complaint filed by the gaming community, the merger would violate the Clayton Antitrust Act by substantially lessening competition in the gaming sector, with subsequent negative effects on consumers.
The FTC is reportedly going to file a lawsuit to stop Microsoft’s bid to acquire Activision. Complainants state that the union will give Microsoft too much control over the gaming sector, allowing it to “foreclose rivals, limit output, diminish customer choice, raise prices, and further hinder competition.”
Microsoft “has already proved that it can and will withhold material from its gaming rivals,” Holly Vedova, director of the FTC’s Bureau of Competition, wrote in a press release. “Today, we’re taking action to prevent Microsoft from acquiring a leading independent game studio and exploiting that company to undermine competition in a number of exciting, rapidly expanding gaming areas.
At a press conference on Tuesday, a Microsoft spokesman defended the merger, claiming that it “will boost competition and generate more options for gamers and game developers.”
Microsoft President Brad Smith issued a statement after the FTC action, saying, “We have total confidence in our position and appreciate the opportunity to present our argument in court.”
Plaintiffs’ attorney Joseph Saveri of San Francisco issued the following statement: “As the video game industry continues to develop and evolve, it is vital that we defend the market from monopolistic mergers that will harm consumers in the long term.”
Even if a relevant case is already being heard by a U.S. agency, private plaintiffs are still allowed to pursue antitrust allegations in U.S. court.