Today marks yet another interesting turn of events for the neverending Microsoft x Activision Blizzard saga. Yesterday, the US Federal Trade Commission announced its decision to sue to block the deal, as it would, in its view, enable Microsoft to 'suppress competitors to its Xbox consoles and its rapidly growing subscription content and cloud gaming business'.
To further its argument, the FTC cited in its complaint that Microsoft had reportedly lied to the European Union's regulatory body regarding the future exclusivity of ZeniMax games when that deal was cleared. Here's the excerpt from the FTC statement:
[...] the FTC pointed to Microsoft’s record of acquiring and using valuable gaming content to suppress competition from rival consoles, including its acquisition of ZeniMax, parent company of Bethesda Softworks (a well-known game developer). Microsoft decided to make several of Bethesda's titles including Starfield and Redfall Microsoft exclusives despite assurances it had given to European antitrust authorities that it had no incentive to withhold games from rival consoles.
However, the investigative news agency MLex contacted the EU regulator today and reportedly received a response that essentially rebukes FTC's on the matter. The article is behind a paywall, but ResetEra user Idas (original poster of the forum's official thread on the Microsoft x Activision Blizzard deal) reported its content on the board. You can find it in its entirety below.
Microsoft didn't mislead EU over ZeniMax deal, watchdog says in response to US concerns
Microsoft didn't make any "commitments" to EU regulators not to release Xbox-exclusive content following its takeover of ZeniMax Media, the European Commission has said.
US enforcers yesterday suggested that the US tech giant had misled the regulator in 2021 and cited that as a reason to challenge its proposed acquisition of Activision Blizzard.
"The commission cleared the Microsoft/ZeniMax transaction unconditionally as it concluded that the transaction would not raise competition concerns," the EU watchdog said in an emailed statement.
The absence of competition concerns "did not rely on any statements made by Microsoft about the future distribution strategy concerning ZeniMax's games," said the commission, which itself has opened an in-depth probe into the Activision Blizzard deal and appears keen to clarify what happened in the previous acquisition.
The EU agency found that even if Microsoft were to restrict access to ZeniMax titles, it wouldn't have a significant impact on competition because rivals wouldn't be denied access to an "essential input," and other consoles would still have a "large array" of attractive content.
We contacted Idas to get proof of the original article. Idas kindly provided them. Nonetheless, we've contacted the European Union to receive an official confirmation on the statement and will update this story if we hear back.
Microsoft and Activision Blizzard announced to have reached a deal for the former to acquire the latter for roughly $68 billion on January 18th, 2022. Sony has been fighting a fierce PR war to proclaim that allowing the deal to happen would endanger competitors and consumers alike.
Some countries already waved it through, like Brazil, Serbia, and Saudi Arabia. Others, like the United Kingdom and the European Union, are conducting a deeper probe into the deal, which was originally targeting a June 2023 date for closing. That date will most certainly prove to be unrealistic if Microsoft and Activision end up fighting the FTC in court as they have promised to do unless the US regulatory body backs down.