Ten gamers are suing Microsoft to prevent its merger with Call of Duty developer Activision Blizzard.
The lawsuit filed in a federal court in the United States alleges that the $69 billion (£56 billion) transaction between the Xbox console manufacturer and its rival will “establish a monopoly in the video gaming business.”
The complaint was submitted two weeks after U.S. officials filed a lawsuit with an administrative judge to halt the transaction.
The merger would be the largest technology deal in the history of the video game industry.
According to the lawsuit, the proposed acquisition would grant Microsoft “extraordinary market dominance in the video gaming business” with the capacity to “extinguish competitors, limit output, reduce customer choice, raise prices, and further hinder competition.
Microsoft, though, defends the proposed takeover. According to a spokeswoman, “this arrangement will increase competition and generate more chances for gamers and game creators as we attempt to deliver more games to more people.”
The Federal Trade Commission (FTC) voiced identical issues in its lawsuit about two weeks ago. The US business watchdog stated that Activision was one of a handful of leading video game developers that produced high-quality games for many platforms.
The proposed acquisition would provide Microsoft with “the ability and incentive to harm competition” by manipulating pricing, degrading games on its competitors’ video game consoles, or withholding content from competitors, resulting in consumer harm, according to a statement from the Federal Trade Commission.
Microsoft’s president, Brad Smith, stated after the FTC filed its lawsuit that the business had “full confidence in our position and welcome the opportunity to address it in court.”
Microsoft also declared it will make Call of Duty available on Nintendo for ten years if the acquisition is finalized, and made a similar commitment to Sony, the maker of the PlayStation console.
Bobby Kotick, chief executive officer of Activision Blizzard, stated in a statement to employees posted on the company’s website, “This sounds scary, so I want to reiterate my confidence that this merger will close.” The accusation that this transaction is anti-competitive is not supported by the facts, and we are confident that we will prevail in this case.
This is one of the most prominent legal battles to result from US President Joe Biden’s commitment to crack down harder on monopolies.
The acquisition, which was disclosed in January, is also facing legal challenges in the European Union and the United Kingdom.
