Federal Trade Commission says told you so over Microsoft acquisition, as it continues appeal against Activision Blizzard purchase.
Last year’s tussle between the Federal Trade Commission (FTC) and Microsoft was the highest profile legal battle in gaming history, as the US government agency tried to prove that buying Activision Blizzard would be bad for the industry and for consumers. The FTC lost its argument but as far as it’s concerned history has proven they were right.
They’ve already made that point in terms of the 1,900 job cuts that Microsoft instituted a few months after acquiring Activision Blizzard and now they’ve argued that the recent price rise and ‘degradation’ of Game Pass is the ‘consumer harm’ they warned about.
It’s not clear that there’s anything they can do about it anymore, but they are still waiting for a judgement from the court of appeal and this will help their case.
Microsoft recently announced a revamp of Xbox Game Pass, which will see price increases across the board and will mean the lowest tier of subscription no longer allows access to first party games released on day one.
The changes were a clear result of the acquisition of Activision Blizzard and in particular preparation for Call Of Duty being available via the service, which risked a major decrease in revenues for Activision if the game was available to play free on Game Pass.
Rather than just shouting into the void, the FTC has already made a filing to the US Court of Appeals.
‘Product degradation – removing the most valuable games from Microsoft’s new service – combined with price increases for existing users, is exactly the sort of consumer harm from the merger the FTC has alleged,’ reads the text.
‘Microsoft’s price increases and product degradation – combined with Microsoft’s reduced investments in output and product quality via employee layoffs – are the hallmarks of a firm exercising market power post-merger.’
The FTC was already appealing last year’s judgment but it’s unclear what, if anything, can be done even if the courts decide they were right all along.
The FTC states that, ‘Microsoft promised that ‘the acquisition would benefit consumers by making [Call Of Duty] available on Microsoft’s Game Pass on the day it is released on console (with no price increase for the service based on the acquisition)’.’ Since that’s now not the case for all tiers of the subscription they do have a point.
The Ninth Circuit Court of Appeals is still yet to make a decision on the FTC’s appeal and when they choose to do so won’t necessarily have anything to do with this latest submission.
If the court does come down on the side of the FTC though that’s going to be very embarrassing for Microsoft and while it’s unlikely to undo the Activision Blizzard acquisition it will make any subsequent ones much more difficult.
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