US Video Gamers sue Microsoft against its takeover of Activision Blizzard INC

Activision Blizzard

A private consumer lawsuit has been filed against Microsoft Corp in a US court, alleging that the technology company’s $69 billion plan to acquire “Call of Duty” producer Activision Blizzard Inc will unlawfully restrict competition in the video game industry.

The action was filed in federal court in California roughly two weeks after the US Federal Trade Commission asked an administrative law judge to prohibit Microsoft, the owner of the Xbox system, from completing the largest-ever acquisition in the video-gaming business.

The private action also seeks an injunction to prevent Microsoft from purchasing Activision. It was filed on behalf of ten gamers from California, New Mexico, and New Jersey.

According to the lawsuit, the planned purchase would give Microsoft “far-outsized market dominance in the video gaming business,” with the capacity to “foreclose rivals, limit output, decrease customer choice, raise prices, and further hinder competition.”

A Microsoft representative defended the agreement on Tuesday, saying it “will boost competition and generate more options for gamers and game creators.” “We have total confidence in our position and appreciate the chance to state our case in court,” Microsoft President Brad Smith said after the FTC sued.

“As the video game industry continues to expand and adapt, it’s vital that we defend the market against monopolistic mergers that would hurt consumers in the long term,” said plaintiffs’ attorney Joseph Saveri in a statement.

Even though a linked US agency action is underway, private litigants can pursue antitrust claims in US court. The takeover, announced in January, is also being investigated for antitrust violations in the European Union.

The FTC earlier stated that it filed the lawsuit to prevent “Microsoft from obtaining control of a leading independent gaming firm.” The combination, according to the government, would undermine competition between competing gaming systems from Nintendo Co Ltd and Sony Group Corp.

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