Federal Trade Commission v. Microsoft Corp. and Activision Blizzard, Inc. was a lawsuit brought against multinational technology corporation Microsoft and video game holding company Activision Blizzard in 2022. The Federal Trade Commission (FTC) sought a temporary injunction against Microsoft in their efforts to acquire Activision Blizzard.
In July 2021, The Wall Street Journal alleged that Activision Blizzard CEO Bobby Kotick engaged in workplace misconduct. Several days later, Microsoft discussed acquiring the company; in March 2021, Microsoft acquired ZeniMax Media for billion. In January 2022, Microsoft announced its intention to acquire Activision Blizzard. The deal would make Microsoft the third-largest gaming company by revenue, raising antitrust concerns. The FTC began reviewing the deal later that month and voted to file a legal challenge to stop Microsoft from acquiring the company in December 2022. A temporary restraining order and preliminary injunction were requested before Judge Jacqueline Scott Corley in June 2023. Corley rejected the preliminary injunction on July 11, and the FTC appealed the ruling a day later. The Court of Appeals for the Ninth Circuit rejected the appeal.
On July 20, 2023, the FTC withdrew its lawsuit. The injunction presented a threat to the acquisition and could have ended it if granted in higher courts. FTC v. Microsoft would have been Microsoft's largest legal challenge since United States v. Microsoft Corp. (2001). On September 15, Microsoft uploaded hundreds of unredacted internal documents to the District Court for the Northern District of California's website, publicly revealing Xbox plans.
Background
On January 18, 2022, Microsoft announced its intention to acquire Activision Blizzard for billion, following the company's acquisition of ZeniMax Media for billion in March 2021 and amid a workplace misconduct lawsuit filed against the company by the California Department of Fair Employment and Housing. According to Securities and Exchange Commission (SEC) filings, Xbox head Phil Spencer discussed acquiring Activision Blizzard days after The Wall Street Journal released its report on Activision Blizzard CEO Bobby Kotick's behavior at the company. The deal, which would add many of Activision Blizzard's franchises to Microsoft's subscription service Xbox Game Pass, would make Microsoft the third-largest gaming company by revenue behind Chinese multinational technology company Tencent and Japanese multinational conglomerate Sony. Call of Duty, an Activision Blizzard franchise, would remain on Sony's PlayStation platform for at least three more games, according to Bloomberg News's Jason Schreier; at the time, the games remaining on PlayStation included Call of Duty: Modern Warfare II (2022), Call of Duty: Warzone 2.0 (2022), and Treyarch's forthcoming Call of Duty game in the main series. Following Schreier's report, Microsoft assured customers that it will keep Activision Blizzard's titles on PlayStation beyond Activision Blizzard's existing agreement with PlayStation, despite making Redfall (2023) and Starfield (2023) exclusive to Windows and Xbox.
Microsoft's intent to acquire Activision Blizzard raised potential antitrust concerns both within the United States and abroad. The Federal Trade Commission (FTC) said it would review the deal on January 31; although acquisitions are usually reviewed by the Department of Justice, the FTC has begun a push into regulating Big Tech. Senators Elizabeth Warren, Bernie Sanders, Sheldon Whitehouse, and Cory Booker—noted opponents of Big Tech—urged FTC chairwoman Lina Khan to investigate the acquisition. In September 2022, the United Kingdom's Competition and Markets Authority signaled it would investigate Microsoft if the company could not answer its concerns. In a blog post, Spencer cited Microsoft's acquisition of Mojang Studios, the developers of Minecraft (2011), for in 2014 as a testament to the company's approach to releasing games on multiple platforms. The European Commission began a provision review later that month and opened an "in-depth investigation" in November.