The U.S. Federal Trade Commission asked a federal court for a preliminary injunction to halt Microsoft’s (MSFT.O) acquisition of Activision Blizzard (ATVI.O).
“If this deal is completed, the combined company… is likely to have the ability, an incentive, to harm competition in various markets related to consoles, subscription services and the cloud (for gaming),” FTC lawyer James Weingarten said in the government’s opening arguments on the first day of a five-day evidentiary hearing.
The FTC wants a judge to ban Microsoft and Activision Blizzard’s $69 billion merger until its in-house court decides if it affects video game competition.
The FTC claims the combination would give Microsoft’s Xbox videogame console exclusive access to Activision titles, excluding Nintendo (7974.T) and Sony Group Corp.’s (6758.T) PlayStation.
“I think you will see that every piece of evidence shows that it only makes sense for Xbox to make these Activision games available to as many people on as many platforms as possible,” Microsoft lawyer Beth Wilkinson said in opening arguments. An injunction could lead to a three-year administrative proceeding that would kill the deal.
Microsoft Gaming CEO Phil Spencer, senior Microsoft finance director Jamie Lawver, former Stadia product manager Dov Zimring, and Sony Interactive Entertainment CEO Jim Ryan will testify by video deposition on Friday.
Microsoft and Activision have waged antitrust challenges worldwide to close the acquisition, including the U.S. complaint. The European Union authorized Microsoft’s “Call of Duty” acquisition in May, but British competition authorities vetoed it in April.
The FTC claims the purchase would give Microsoft the “ability and increased incentive to withhold or degrade Activision’s content in ways that substantially lessen competition.”
Microsoft has offered to enter a 10-year consent decree with the FTC to provide “Call of Duty” games to rivals, saying the deal would benefit gamers and gaming companies.
The hearing lasts through June 29. Satya Nadella and Bobby Kotick will testify next week.
