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| Microsoft's $68.7 billion deal under threat |
Bloomberg reports that the US Federal Trade Commission (FTC) is handling an antitrust review of Microsoft's $68.7 billion acquisition of Activision Blizzard.
The report said the Federal Trade Commission, not the Department of Justice, was investigating whether the acquisition would harm competition. So the case is in the hands of an agency that promises stricter controls on takeovers.
The Federal Trade Commission and the Department of Justice share responsibility for the joint antitrust review. They often agree on which of them is investigating the case.
The Federal Trade Commission and the Department of Justice jointly said last month that the industry is becoming increasingly concentrated. They added that the increase in merger applications in 2020 and 2021 indicates that the situation may worsen.
Days later, the Federal Trade Commission voted unanimously to file a lawsuit to prevent firearms maker Lockheed Martin from buying Aerojet Rocketdyne for $4.4 billion over antitrust concerns.
FTC Chair Lina Khan has long advocated a more aggressive approach to transaction vetting, especially for big tech companies, which she says can use their dominance in one area of business to gain power in other markets.
Under his leadership, the agency filed a lawsuit to block two major acquisitions - Nvidia's proposed acquisition of Arm and Lockheed Martin's purchase of Aerojet Rocketdyne.
The United States is reviewing Microsoft's deal with Activision Blizzard
The Activision Blizzard survey focused on the integration of the Activision Blizzard franchise with Microsoft platforms.
Regulators may consider how Microsoft's ownership of Activision Blizzard could affect competitors by restricting their access to the company's biggest games.
Microsoft announced its biggest deal in January. It will be the largest cash acquisition ever. The deal cements Microsoft's strength in the booming video game market, where it competes with Tencent and Sony.
Meanwhile, Sony announced that it would buy Bungie, creator of the Halo video game and developer of Destiny, for $3.6 billion, the latest wave of mergers and acquisitions to have swept the game industry.
So far, Microsoft has avoided the scrutiny faced by Alphabet and Meta. But the deal makes it the world's third largest gaming company, putting the Xbox maker at odds with lawmakers.
Reuters previously reported that Microsoft will pay $3 billion in fines if the deal fails. This shows that the software giant is confident of receiving antitrust approval.
Microsoft and Activision Blizzard have pledged to close the deal by June 2023.
Microsoft's last major acquisition was Nuance last summer for $17 billion, which was approved by US and European officials. The UK Competition and Markets Authority is still reviewing the deal.