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The FTC Is Suing Microsoft to Block It From Purchasing Activision Blizzard, a Video Game Holding Company The Federal Trade Commission said it could be negative for competition in the gaming sector.

By Gabrielle Bienasz

Opinions expressed by Entrepreneur contributors are their own.

Bloomberg I Getty Images
Activision's offices in 2021

The Federal Trade Commission has moved to stop Microsoft from purchasing video game holding company, Activision Blizzard, according to the Wall Street Journal.

"Microsoft has already shown that it can and will withhold content from its gaming rivals," said Holly Vedova, director of the FTC's Bureau of Competition, which focuses on antitrust enforcement, in a statement.

"Today we seek to stop Microsoft from gaining control over a leading independent game studio and using it to harm competition in multiple dynamic and fast-growing gaming markets," she added.

Microsoft moved to purchase Activision Blizzard in January in an all-cash deal that was valued at around $70 billion. "When the transaction closes, Microsoft will become the world's third-largest gaming company by revenue, behind Tencent and Sony," the company wrote in a statement at the time.

Activision Blizzard owns tiles such as "Guitar Hero" and "Call of Duty." It was founded in 1979 and is headquartered in Santa Monica, California.

"The $69 billion deal, Microsoft's largest ever and the largest ever in the video gaming industry, would enable Microsoft to suppress competitors to its Xbox gaming consoles and its rapidly growing subscription content and cloud-gaming business," the FTC added in its statement.

Because of the suit, the case will now head to court. The FTC and Department of Justice have the legal authority to examine mergers, generally speaking, of over $101 million in value, and can use legal tools to block them if they find they will "substantially lessen competition."

Microsoft has already said it plans to push back against the block.

"While we believed in giving peace a chance, we have complete confidence in our case and welcome the opportunity to present our case in court," a spokesperson for the company said, per The Washington Post.

Gabrielle Bienasz is a staff writer at Entrepreneur. She previously worked at Insider and Inc. Magazine. 

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