Microsoft Sued by Video Gamers Claiming Its Activision Takeover Deal Will Stifle Competition

Microsoft was hit on Tuesday in US court with a private consumer lawsuit claiming the technology company's $69 billion (roughly Rs. 5,71,200 crore) bid to purchase Call of Duty maker Activision Blizzard will unlawfully squelch competition in the video game industry.

The complaint filed in federal court in California comes about two weeks after the US Federal Trade Commission (FTC) filed a case with an administrative law judge seeking to stop Microsoft, owner of the Xbox console, from completing the largest-ever acquisition in the video-gaming market.

The private lawsuit also seeks an order blocking Microsoft from acquiring Activision. It was filed on behalf of 10 video game players in California, New Mexico and New Jersey.

The proposed acquisition would give Microsoft "far-outsized market power in the video game industry," the complaint alleged, "with the ability to foreclose rivals, limit output, reduce consumer choice, raise prices, and further inhibit competition."

A representative for Microsoft did not immediately comment on Tuesday. After the FTC sued, Microsoft President Brad Smith said, "We have complete confidence in our case and welcome the opportunity to present our case in court."

In a statement, plaintiffs' attorney Joseph Saveri in San Francisco said, "As the video game industry continues to grow and evolve, it's critical that we protect the market from monopolistic mergers that will harm consumers in the long run."

Private plaintiffs can pursue antitrust claims in US court, even while a related US agency case is pending. The takeover, announced in January, also faces antitrust scrutiny in the European Union.

The FTC previously said it sued to stop "Microsoft from gaining control over a leading independent game studio." The agency said the merger would harm competition among rival gaming platforms from Nintendo and Sony Group.

© Thomson Reuters 2022