Crunch time in FTC fight against Microsoft deal to buy Activision

By Greg Bensinger and Diane Bartz

WASHINGTON (Reuters) – Lawyers for the Federal Trade Commission and Microsoft (NASDAQ:), which is seeking to buy Activision Blizzard (NASDAQ:), trade their final blows and make their final points on Thursday before a judge who has been asked to tap the brakes on the proposed $69 billion transaction.

The Federal Trade Commission has asked a judge to stop the proposed acquisition because, it argues, it would give Microsoft, maker of the Xbox console, exclusive access to Activision games which include “Call of Duty,” one of the best-selling games of all time. That would leave Nintendo and Sony (NYSE:) Group out in the cold, the FTC has said.

Microsoft CEO Satya Nadella sought to allay those concerns on Wednesday. Asked if Microsoft would have any incentive to shut out Sony’s PlayStation in order to sell more Microsoft Xbox consoles, Nadella responded: “It makes no economic sense and no strategic sense.”

To address the FTC concerns, Microsoft has agreed to license “Call of Duty” to rivals.

The FTC has asked Judge Jacqueline Scott Corley in San Francisco to temporarily stop the deal from closing in order to allow the agency’s in-house judge to decide the case.

In the past, the side that lost in federal court often conceded and the in-house process was scrapped.

The FTC, which enforces antitrust law, has taken a harder line on mergers during the Biden administration to protect consumers from being disadvantaged by powerful corporations.

Activision CEO Bobby Kotick testified Wednesday that if Microsoft bought his company and blocked other gaming platforms from offering “Call of Duty,” it would alienate many of the 100 million monthly active users.

“You would have a revolt if you were to remove the game from one platform,” he said.

Resolving the U.S. lawsuit is one of several key antitrust battles Microsoft and Activision have fought around the world.

Microsoft’s bid to acquire the “Call of Duty” videogame maker was approved by the European Union in May, but British competition authorities blocked the takeover in April.