Microsoft Corp and Activision Blizzard Inc are facing a legal challenge from the U.S. government over their proposed $69 billion merger, which would create the world’s largest video game company.
The U.S. Federal Trade Commission (FTC) filed a lawsuit on Tuesday to block the deal, arguing that it would harm competition and innovation in the gaming industry. The FTC said that Microsoft, which owns popular franchises such as Halo, Minecraft and Forza, would gain an unfair advantage by acquiring Activision, which owns blockbuster titles such as Call of Duty, World of Warcraft and Candy Crush.
The two companies said they were confident that the merger would benefit gamers and the industry, and that they would defend it in court. They said they expected to testify on Wednesday before a U.S. district judge in Washington, D.C., who will decide whether to grant a preliminary injunction to stop the deal from closing.
Microsoft and Activision announced the merger in January, saying it would create a gaming powerhouse that could offer more diverse and immersive experiences to players across platforms and devices. They said they planned to close the deal by mid-2023, subject to regulatory approvals.
The merger has also raised concerns among some lawmakers and gaming communities, who fear that it could reduce consumer choice, raise prices and stifle creativity. Some have also questioned Microsoft’s commitment to preserving Activision’s independence and culture, especially in light of the recent allegations of sexual harassment and discrimination at the company.
