Microsoft and Bethesda are involved in one of the more shocking gaming revelations of the year, as it was revealed today that Microsoft has acquired the Fallout and Elder Scrolls developer. Some fans cried foul at the move, wondering if it is fair or even legal for the Xbox creator to purchase Bethesda. But a legal expert has weighed in and claims that this is not a monopolistic type move and that it is very much legal.

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According to David Hoppe, Managing Partner at Gamma Law, the Microsoft acquisition of ZeniMax Media should not be a problem for anti-trust regulators. Vertical mergers, such as this one, are historically less problematic. An example of a horizontal merger is when Disney purchased Fox and merged for over 70 billion dollars in 2019. In this circumstance, two competitors join forces and can end up cornering the market. These horizontal mergers can be much more tricky and dangerous for competition.

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[In the case of vertical mergers] you can still have concerns over consumer choice and monopoly pricing. But those concerns are going to be much diminished because you’re still going to have independent competitors.

The move is considered a vertical one because Microsoft is the distributor and ZeniMax (Bethesda) is the content producer. An example in an entirely different industry would be if McDonald's were to purchase one of the largest potato producers. As a vertical merger, other fast-food chains can still find other places to get potatoes. Meanwhile, if McDonald's were to buy and merge with Burger King, it would be a horizontal merger that could theoretically be something that anti-trust regulators see as overly unfair to competition, such as Wendy's.

Hoppe did say that there is a hypothetical argument that can be made, however, that points to this Microsoft purchase of Bethesda having a negative impact on competition. If Microsoft were to continue to buy game studios, eventually people "wouldn’t want to buy a PS5." But Microsoft isn't purchasing every developer out there, so therefore the move is fair. Additionally, the fact that Microsoft has allowed its games in the past to be sold on other distributor platforms/consoles certainly helps (i.e. Minecraft after Microsoft purchased Mojang).

As of right now, everything is on the up and up. Because companies like Rockstar, Activision/Blizzard, EA, Bungie, CD Projekt Red, and others and are still creating games for each console manufacturer, Microsoft has not done anything that would go against anti-trust laws with this vertical acquisition. If Nintendo and PlayStation were to horizontally merge, however, for example, that would be a whole different story.

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Source: IGN