The Clayton Antitrust Act of 1914 gives Americans the right to sue companies over anticompetitive behavior, a fact which 10 self-described gamers are using to take Microsoft to court, aiming to halt the company’s acquisition of Activision.
As reported by Bloomberg Law, the complaint, filed today and obtained by Kotaku, states that the plaintiffs, or “video gamers” as they’re described, are concerned that “the [Microsoft and Activision] merger may substantially lessen competition or tend to create a monopoly;” this merger, the complaint states, would specifically be in violation of Section 7 of the Clayton Act, which states that acquisitions that diminish competition are prohibited under U.S. antitrust law. The complaint not only cites the scale and scope of the Activision and Microsoft merger as problematic, but also that this latest proposed union follows numerous other Microsoft acquisitions ranging from its 2014 purchase of Mojang all the way up to its acquisition of Rare in 2022.
Thoroughly laying out console, PC, and AAA gaming, as well as subscription services as “Relevant Product Markets,” the suit calls attention to just how many large franchises will fall under Microsoft’s corporate umbrella should the merger go through. Call of Duty, World of Warcraft, Minecraft, Doom, Microsoft Flight Simulator, Halo, and The Elder Scrolls are just some of the cited examples. It maintains that currently Microsoft and Activision compete directly through these titles and services like Battle.net, the Microsoft Store, and Game Pass. The merger would shatter that competitive dynamic.
Should the merger go through, the suit claims, Microsoft would hold “outsized market power and the ability to foreclose key inputs to rivals and further harm competition.” The suit mentions competition both whereas it concerns sales to consumers, as well as the competition in the industry to “hire and retain talent within specialized video game labor,” which would be “lessened” under the merger.
Kotaku has reached out to Microsoft for comment.
The proposed MIcrosoft / Activision merger has been a lightning rod for controversy ever since its initial announcement. Perhaps most worrying for Microsoft is the recently filed lawsuit from the FTC. The feds allege that, should this merger go through, it would pose serious harm to competition in the video game industry, citing past behavior of Microsoft to prioritize Xbox and Windows PCs as platforms for its games. Microsoft has disagreed, stating that the Activision acquisition would “bring Call of Duty to more gamers and more platforms than ever before.”
Speaking of Call of Duty, in response to criticisms of its intended merger with Activision, Microsoft has pledged to continue to deliver Call of Duty to other platforms for at least 10 years. Microsoft Gaming CEO Phil Spencer has categorized Sony’s criticisms of the acquisition as an attempt to “protect its dominant position on console” and that it seeks to grow by “making Xbox smaller.”