The U.S. Federal Trade Commission clarified its decision to side with Sony in opposing Microsoft's proposed purchase of Activision Blizzard. The FTC sued to block Microsoft's Activision Blizzard acquisition on antitrust grounds in December 2022.
Microsoft's pending buyout offer for Activision Blizzard, which also includes Candy Crush maker King, is the largest such public acquisition attempt in the history of the gaming industry. Valued at nearly $69 billion, the proposed deal dwarfs Take-Two's record takeover of Zynga, which cost the publisher $12.7 billion in 2022. The FTC has so far mounted the largest legal challenge to the deal, but the U.S. Legislature isn't unified in supporting the executive agency's lawsuit.
This government rift was most recently underlined at an April 18 hearing on the FTC budget for fiscal year 2024, which Republican representative Diana Harshbarger used as an opportunity to ask why the regulator "sided with Sony" in opposing Microsoft's Activision Blizzard acquisition. FTC Chair Lina Khan responded that the agency always finds feedback from all market participants highly beneficial, thus dismissing the allegation that the lawsuit was motivated by a desire to help Sony. While remarking that the antitrust complaint against Microsoft can "speak for itself," Khan insisted that the FTC's attempt to block the deal is based on an independent assessment "based on the law and the facts."
The fact that a Republican politician questioned the decision-making of a Democratic-appointed regulator isn't particularly surprising, but Rep. Harshbarger's sentiment about Sony not needing protection appears to have some bipartisan momentum. Democratic Senator Maria Cantwell criticized Sony's monopolistic practices in March 2023, arguing that the company's anti-competitive conduct inhibited Microsoft's growth in Japan. A similar perspective was outlined in Republican Senator Kevin Cramer's April 2023 letter to Sony, wherein he also posited that the Japanese gaming giant's hold on the console market hurts the economic development prospects of North Dakota, his home state.
In spite of the FTC's opposition to the blockbuster buyout, a number of independent analysts believe Microsoft is likely to complete the Activision Blizzard acquisition in the near future. According to that perspective, the agency's antitrust lawsuit is an aggressive attempt at extracting meaningful concessions from Microsoft, who'd rather settle than get wrapped up in a years-long legal battle with the FTC, even if it was likely to win in the end.
This view is far from controversial, seeing how Microsoft itself repeatedly told investors that it expects the transaction to go through come mid-2023. That timeframe wouldn't allow for the FTC to exhaust all of its legal options —i.e., appeals—for opposing the merger, which suggests that Microsoft is pushing for a settlement. The Activision Blizzard acquisition has so far been approved by Saudi Arabia, Brazil, Serbia, Chile, Japan, and South Africa, in that order.
Sources: Kevin Cramer (PDF), Statista