Ten gamers are suing Microsoft to prevent the company from merging with Activision Blizzard, the company that makes Call of Duty.
The Xbox console maker’s acquisition of its rival for $69 billion (£56 billion), according to the lawsuit filed in a US federal court, will “establish a monopoly in the video game industry.”
The complaint was submitted two weeks after US regulators asked an administrative judge to halt the transaction.
The merger would be the biggest technology deal in the history of the video game industry.
According to the lawsuit, the proposed acquisition would give Microsoft “far-outsized market power in the video game business,” giving it the potential to eliminate competitors, restrict output, limit consumer choice, increase prices, and further stifle competition.
Microsoft, though, is supporting the proposed takeover. According to a spokeswoman, “This partnership will increase competition and produce more options for players and game developers as we strive to bring more games to more people.”
Similar issues were brought up by the Federal Trade Commission (FTC) in its lawsuit about two weeks ago. The US business watchdog identified Activision as one of a select group of leading video game studios that produced top-notch titles for various platforms.
We continue to believe that our deal to acquire Activision Blizzard will expand competition and create more opportunities for gamers and game developers.
— Brad Smith (@BradSmi) December 8, 2022
The agency claimed in a news release that the proposed acquisition would give Microsoft “both the means and desire to undermine competition” by manipulating prices, degrading games on rival video game consoles, or “withholding content from competitors entirely, resulting in harm to consumers.”
Brad Smith, the president of Microsoft, stated the business had “full confidence in our argument” and welcomed the chance to argue it in court after the FTC launched its action.
Microsoft also made a similar offer to rival Sony, which makes the PlayStation console, and stated that if the acquisition went through, it would make Call of Duty available on Nintendo for 10 years.
In a statement to colleagues that was posted on the Activision Blizzard website, CEO Bobby Kotick stated, “This sounds scary, so I want to underline my confidence that this merger will close.” The claim that this agreement is anti-competitive is unfounded, and we anticipate winning this legal battle.
As a result of US President Joe Biden’s promise to take a tougher stance against monopolies, this has grown to be one of the most prominent court battles to take place.
The takeover, which was announced in January, is also being challenged in court in the UK and the European Union.