The Federal Trade Commission, in one of the most aggressive actions taken by federal regulators in decades to check the power of the tech industry’s giants, on Thursday sued to block Microsoft’s $69 billion acquisition of the video game maker Activision Blizzard.
The F.T.C. said in its lawsuit that the deal would harm consumers because Microsoft could use Activision’s blockbuster games like Call of Duty to lure gamers from rivals.
The agency’s commissioners voted three to one to approve filing the suit.
The decision is a blow to the expansion of Microsoft’s video game business, which has become its most important consumer unit and topped $16 billion in annual sales during the most recent fiscal year. For the F.T.C. chair, Lina Khan, a legal scholar who rocketed to fame after she wrote an article criticizing Amazon, the lawsuit will test whether her aggressive plan to rein in the power of Big Tech can survive in the courts.
Microsoft’s acquisition of Activision would be the largest consumer technology deal since AOL bought Time Warner two decades ago. It would marry Microsoft’s Xbox console and game streaming service, which many consider gaming’s future, with Activision titles like Call of Duty and Candy Crush. The scale of those games is enormous: Activision says it has almost 370 million active users each month.
“Microsoft has already shown that it can and will withhold content from its gaming rivals,” said Holly Vedova, director of the FTC’s Bureau of Competition, in a statement. “Today we seek to stop Microsoft from gaining control over a leading independent game studio and using it to harm competition in multiple dynamic and fast-growing gaming markets.”
This is a developing story. Check back for updates.