In December 2023, Microsoft and the US Federal Trade Commission battled in court over Microsoft"s acquisition of Activision Blizzard. Even though Microsoft closed the deal to buy the game publisher in October, the FTC feels that this deal is still a threat to competition in the game industry and would like to see it reversed by the courts.
While we still await the Appeals Court"s decision on this matter, the FTC decided to send a formal complaint to the court today (via The Verge). The reason is related to Microsoft"s decision a few weeks ago to lay off 1,900 team members from its various gaming divisions, including a large number of Activision Blizzard employees.
The FTC claims in its previous statements about the purchase of Activision Blizzard Microsoft said that the publisher would be run more like an independent company so that it could sell off some or all of the business in the event the FTC wins the court case and orders Microsoft to cancel the deal.
However, the FTC says that the mass layoffs at Microsoft don"t appear to show Activision Blizzard is being run as a separate entity. The FTC"s statement added:
Specifically, Microsoft reportedly has stated that the layoffs were part of an “execution plan” that would reduce “areas of overlap” between Microsoft and Activision, which is inconsistent with Microsoft’s suggestion to this Court that the two companies will operate independently post-merger.
The agency says that this development will "underscore the FTC"s need for injunctive relief pending completion of the administrative proceeding." There"s no word yet on when the appeals court will decide this case.
Meanwhile, Microsoft Gaming CEO Phil Spencer stated earlier this week on his X (formerly Twitter) account that it will be revealing "more details with you about our vision for the future of Xbox" sometime in the next week. Exactly when that will take place and how it might affect Activision Blizzard remains to be seen.
Update - February 8 - A Microsoft spokesperson sent Neowin this statement:
In continuing its opposition to the deal, the FTC ignores the reality that the deal itself has substantially changed. Since the FTC lost in court last July, Microsoft was required by the UK competition authority to restructure the acquisition globally and therefore did not acquire the cloud streaming rights to Activision Blizzard games in the United States. Additionally, Sony and Microsoft signed a binding agreement to keep Call of Duty on PlayStation on even better terms than Sony had before.