It looks very likely that the FTC (Federal Trade Commission) may take legal action to block the Activision Blizzard deal.

According to a new report in Politico, the US Federal Trade Commission is “likely” to file an antitrust lawsuit. They aim to prevent Microsoft from completing its acquisition of Activision Blizzard. This is according to sources with inside knowledge of the FTC’s workings, who say the agency’s investigative staff is “sceptical” about the companies’ arguments.

But the probability is no guarantee: FTC commissioners have not yet met with Microsoft and Activision lawyers, nor have they voted on a formal complaint. The FTC declined to comment on Politico’s report.

Under current chair Lina Khan, the commission has vowed to crack down on mergers and acquisitions by big tech companies. It has already demonstrated this with its failed attempt to acquire ARM from Nvidia. The FTC began investigating the deal between Microsoft and Activision earlier this year when it was announced.

Microsoft’s possible acquisition of Activision was perhaps the hottest topic in the gaming news this year. Depending on who you listen to, it could either mean a seismic shift in how video games are done or a relatively minor power shift between the big three game console manufacturers. An FTC lawsuit, however, would be a huge blow and would stall the deal from being finalized for a significantly extended period. Or even scupper it.

Microsoft’s lawyers have argued mainly that a single game franchise cannot make or break a game console. In contrast, Sony’s lawyers recently told the UK competition regulator that rival franchise Battlefield “cannot keep up” with Activision’s Call of Duty.

It has also recently emerged that Microsoft had offered Sony a ten-year contract. This would guarantee that Call of Duty would be released on PlayStation consoles. In the worst case, this would give Sony enough time to develop a proper Call of Duty competitor. However, Sony has not said much publicly about this.

Source: Politico