Home Gadgets and Technology Microsoft Responds to the Federal Antitrust Lawsuit
Gadgets and Technology

Microsoft Responds to the Federal Antitrust Lawsuit

Microsoft CEO Brad Smith

In response to the Federal Antitrust lawsuit, Microsoft says the Activision Blizzard deal will not harm competition. 

What is the Complete News?

On Thursday, a group of 10 video gamers from the US filed a Federal Antitrust Lawsuit against Microsoft. According to the agency, the lawsuit attempts to block the software developer from purchasing video game publisher Activision Blizzard. 

Microsoft claimed that it would not hurt the competition. According to The Federal Trade Commission, the $68.7 billion acquisition is the most significant government pushback Microsoft has handed out. 

When Donal Trump was the president of America, various renowned companies had to face a lot of inquiries from US officials. These companies include Amazon, Facebook, Alphabet and Apple.

However, it also left Microsoft to continue expanding with acquisitions through the President Joe Biden elections. Even under the presidency of Joe Biden, the technology Critic Lina Khan took over at the FTC. 

When Microsoft was planning to deal with Activision Blizzard, the FTC argued that the deal would violate federal law. 

What Microsoft has to Say about the Lawsuit

Microsoft’s President and Chairman, Brad Smith, made a statement that the deal will protect the competition, consumers and workers in the tech sector. He said the door never closes the opportunities to find something that can benefit everyone. They’ve learned much from their previous lawsuit, he added.

The company even agreed to offer concessions to relieve the government’s opposition to the deal. The CEO of Microsoft’s gaming unit also made a statement that the company is committed to bringing Activision Blizzard’s Call of Duty games to Nintendo consoles. 

They are looking to keep the games on valves’ Steam game store. They even went to Sony to sign a 10-year agreement to release Call of Duty games on PlayStation consoles. But Sony refused to deal. 

Microsoft said that playing Activision Blizzard games will be affordable as it will not be available through subscription services such as Microsoft’s Game Pass. It also can’t upend a highly competitive industry. 

After a year of investigating the deal and millions of documents from Activision Blizzard, Microsoft revealed that the FTC hadn’t shown any evidence that the company extracted the game series from PlayStation. 

What’s Next?

Due to the process under the Fifth Amendment of the US constitution, Microsoft stated that FTC’s procedures are violating their right to practice. In response to the agency describing three ways the Activision Blizzard deal could lessen competition, more than 2100 emails were sent to the UK’s competition and market by members of the public. 

In 2100 emails, around 75% of emails were in favour of the deal. 

According to Spencer, Microsoft will become the world’s third gaming company behind Sony and Tencent by revenue if the deal closes. 

However, CEO Bobby Kotick claimed that no legitimate reason is going to prevent the deal’s closing. There is enormous competition and few barriers in the industry to enter. Tools are available for every small and large game developer. And Microsoft believes it can prevail on the case’s merits. 

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