In a move that is sure to have lasting effects on the video game industry, Republican lawmakers in the House of Representatives penned a letter addressed to the Federal Trade Commission (FTC) condemning its ongoing legal battle against Microsoft. The lawmakers are calling on the Commission to drop its case against Microsoft’s proposed acquisition of Activision Blizzard, claiming that it is a pro-competitive transaction.
In the letter, the GOP members state, “We write to express our concerns, and to urge you to drop this matter. The latest, and most egregious, example of the FTC’s rejection of sound antitrust policy was the decision to seek a preliminary injunction against a procompetitive transaction, Microsoft’s proposed acquisition of Activision.”
Microsoft, maker of the Xbox video game console, is seeking to finalize its US$69 billion deal with ‘Call of Duty’ video game maker Activision Blizzard, Inc. This proposed deal would be the largest in the history of the video game industry and the biggest ever for Microsoft. According to the letter, the acquisition “is intended to help Xbox make these games available to a wider set of consumers, especially those who prefer to play on mobile devices. For two decades, Microsoft’s Xbox business has been the much smaller challenger in the video game publishing and video game console markets.”
The GOP legislators’ letter to the FTC went on to say, “The FTC’s case against Microsoft’s acquisition of Activision is the latest in a series of actions that are clearly designed to impede legitimate mergers and acquisitions, while ignoring decades of settled FTC practice across Republican and Democratic administrations. Instead of protecting competition as Congress intended, the FTC has spent taxpayer resources seeking to block a deal that promises to expand consumer choice and insulate a dominant foreign company from competition.”
Rep. Kevin Kiley (R-CA) took his stance a step further, accusing Khan of wasting taxpayer dollars and criticizing the FTC’s recent failures in merger trials. However, a US District Court judge ruled last week that the deal was legal and an appeals court declined an emergency motion to pause the transaction. Despite these rulings, however, the FTC has scheduled an evidentiary hearing before an Administrative Law judge on August 2.
The Republican lawmakers in the House have urged the FTC to “return to commonsense antitrust policies” and have stressed the importance of upholding the decision towards the proposed deal. The industry is eagerly awaiting the outcome of the proposal and remains hopeful that the merger will be allowed to go through.