FTC Gets Called Out During Hearing For Supporting Sony Over Activision Deal

Is The FTC Siding With Sony?

The Activision Blizzard acquisition has been subject to stiff resistance from multiple regulators and gaming giants since the initial announcement in early 2022. Sony, in particular, has been entirely against the idea of Microsoft owning IPs like Call of Duty.

Regulators like the CMA and FTC were also not fond of the idea. While the CMA appears to be relaxing concerns about the merger, the latter has been Microsoft’s most significant hurdle toward getting the deal approved.

 Regarding the opposition from the FTC, a representative from Tennessee addressed the situation during a recent hearing. She asked Lina Khan, the FTC chairwoman, why the regulator decided to side with Sony on this deal.

Mrs. Harshbarger from Tennessee elaborated that competition laws should not favor the dominant player. She then quoted that Sony has 68% of the global share for high-end gaming consoles.

This puts Microsoft at a clear disadvantage against Sony, making it odd that the FTC has been so vocal against the deal. Previously, the regulator sued Microsoft over the deal, to which the gaming giant responded confidently, standing ready to appear in court.

Addressing concerns over the FTC, Microsoft has also called the regulator’s approach to the Activision Blizzard acquisition unconstitutional, citing various violations under the Fifth Amendment.

However, the FTC remains confident in its approach. Responding to the question, Lina Khan had this to say:

“We always really benefit from hearing market participants including big players.”

As mentioned earlier, other regulators have been against Microsoft’s deal. With authorities like the CMA and European Commission opposing the deal until recently, the FTC is far from the only regulator to stand against Microsoft.

The popularity of Call of Duty and decades of influence over the gaming industry have made it an undeniable powerhouse in the market. Therefore, many authorities have rigorously ensured the deal does not harm the competition and consumers.

Lina Khan further said:

“At the end of the day, we always make our own independent judgements based on the law and the facts.”

This should mean that the regulator is looking at both sides of the argument to reach a fair conclusion that can benefit the consumers instead of catering to either gaming giant.

Microsoft was previously hoping to close the Activision Blizzard acquisition by June 2023. However, the FTC will not announce its final decision before August, which could lead to a change of plans for Activision and Microsoft.

The FTC recently requested more documents on Microsoft’s agreements with Nintendo and Nvidia. While this might delay the eventual outcome further, the regulator will examine the evidence thoroughly before announcing a final decision.

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