Microsoft’s proposed $68.7 billion acquisition of Activision Blizzard was a predictably messy affair. Although the deal has been approved in several countries such as Saudi Arabia and Brazil, it faces hurdles in major markets such as the EU and the US. It is being reviewed in the UK by the Competition and Markets Authority (CMA) while the US Federal Trade Commission has said outright that it does not want the deal to go through. to practice Now, an independent group of gamers has also sued Microsoft over the purchase.
The lawsuit in question was filed by 10 American gamers, three of whom play exclusively on PlayStation consoles. It is important to note that this is not a class action lawsuit and that it names only Microsoft as a defendant in the case, and not Activision Blizzard.
The 45-page document claims that if the acquisition is allowed to proceed, it will have many negative effects on the industry as a whole. These include reduced competition, higher prices, less creativity, decreased productivity and Activision games locked to Microsoft’s own platforms. Excerpts from the lawsuit are quoted below:
The proposed acquisition of Activision Blizzard by Microsoft poses a material threat to the plaintiffs, and the public as a whole, in that the proposed acquisition may substantially reduce competition in each of the relevant product markets, and may cause losses to the plaintiffs, and the public as a whole, in the form of higher prices, less innovation, less Creativity, less consumer choice, decreased productivity, and potential anti-competitive effects, depriving plaintiffs, and the public in general, of the benefits that come with competition. Microsoft’s proposed acquisition of Activision Blizzard may also significantly reduce competition in the labor market for video game talent.
Workers in the video game industry may have less choice among employers, and Microsoft may have excessive market power in recruiting and retaining workers in the video game industry, which requires special talent. […] Market concentration may further limit the bargaining power of workers and their ability to change employers to improve working environments and compensation.
Activision Blizzard is one of Microsoft’s main competitors for top talent in the gaming content industry. Microsoft’s proposed acquisition of Activision Blizzard could reduce competition for talent in this area. The merger of Microsoft and Activision Blizzard will irreparably harm competition as Microsoft acquires, thereby eliminating one of only a few significant game content creation rivals. The current and future competition between Microsoft and Activision Blizzard will be irrevocably lost. If Microsoft’s acquisition of Activision Blizzard is allowed to go ahead, Microsoft may have large market power in several key gaming markets, including the labor market, allowing Microsoft to further stifle competition.
The plaintiffs demanded that the purchase contract of Microsoft and Activision be declared null and void, and that they should be permanently restricted from moving in this direction again. They also demanded that Microsoft pay for the cost of the lawsuit, including “reasonable” attorney fees. It remains to be seen whether the lawsuit will hold up in court.
source: Claim document Through Reuters, Bloomberg