FTC Wants to Investigate Microsoft's Deals With Sony & Ubisoft in Bid to Block Activision Deal

The FTC played another card in its bid to block Microsoft's acquisition of Activision Blizzard. Now it wants to investigate the deals with Sony and Ubisoft.🤔

Published: October 12, 2023 12:09 PM /


Parody of Microsoft and FTC arguing about Sony and Ubisoft using Ace Attorney characters

The US Federal Trade Commission (FTC) has played another card in its ongoing bid to block the $68.7 billion acquisition of Activision Blizzard by Microsoft.

The regulator's complaint counsel submitted to its own administrative law judges a motion to extend fact discovery focusing on the deals between Microsoft and Ubisoft over the streaming rights of Activision Blizzard's games, and between Microsoft and Sony over the permanence of the Call of Duty franchise on PlayStation. 

According to the FTC, these deals require scrutiny to provide the court with a complete picture of the facts and won't impact the schedule of the hearing on the merits.  

The motion goes as far as including a proposed order that would give the FTC the ability to "serve requests for production of documents and data, interrogatories, notices of depositions, and subpoenas" on the matter. It also includes proposed limits of ten requests of documents and ten interrogatories from Microsoft and ten requests of documents and five interrogatories from Activision Blizzard.

The deadline for completing the investigation would be eight weeks from the issuing of the order.

Call of Duty: Modern Warfare 3 Screenshots with characters taking aim
The Call of Duty franchise plays a central role in the complaints.

The regulator mentions that it had no opportunity to investigate the deals and reveals that it heard of the agreement with Ubisoft only after it was publicly announced. It also argues that "the agreements and their possible effects on American consumers in the relevant markets present complex questions of fact that require additional discovery."

The FTC argues that there is a (redacted) clause under the current pricing terms that apparently raises doubt about whether it could ever be profitable for Ubisoft to license these games to streaming service providers. If not, it could prevent new Activision games from being offered on those services, resulting in an anticompetitive effect.

The regulator also alleges that "Ubisoft’s ability, incentives, and plans to market cloud streaming rights for Activision games are now highly relevant."

Microsoft and Activision are currently working toward consummating the deal after the British authority (CMA) issued a preliminary approval. The final order is expected in a matter of days.

If the parties can close the deal before the FTC's hearing in front of its administrative law judges, which is probable, the regulator has no power to stop it. At that point, they'd have to seek a divestiture after the fact, which would be a long process with high legal requirements. The motion surfaced today doesn't have any effect on this.

With the deal approved in the vast majority of the world's market, the FTC currently stands pretty much alone in its opposition to its consummation. 

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