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"We believe that the transaction may lead to an undue concentration of market power."

Chris Kerr, News Editor

March 3, 2022

2 Min Read

A number of advocacy groups have called on the Federal Trade Commission (FTC) to investigate Microsoft's proposed acquisition of Activision Blizzard for potential anticompetitive effects.

In an open letter shared online, 15 organizations including labor union Communication Workers of America (CWA) and consumer rights advocacy group Public Citizen implored the FTC to "closely scrutinize" the $68.7 billion deal.

The group believes the deal raises serious competition issues for the video game sector, and claims the FTC should be concerned about the acquisition whether it's viewed as a vertical or horizontal merger.

For context, a vertical merger is a deal between companies operating at different stages of production within the same market, while a horizontal merger would see one company acquire another that produces and sells the same products.

"We believe that the transaction may lead to an undue concentration of market power when viewed as a vertical or horizontal merger, threaten data privacy and security, undermine consumer protection online, impinge on the consumer right to repair and exacerbate worker disempowerment and wage suppression," wrote the group.

The group said there has been an "alarming pattern of concentration" in the games industry over the past several years, and suggests that allowing Microsoft to continue purchasing major studios and publishers with impunity could hurt consumers, place workers in jeopardy, and leave customer data at risk.

"Microsoft’s expanding role in the gaming market may result in the company using its leverage to raise subscription prices and limit options, among other possible consumer harms," continues the letter.

"This merger could [also] strengthen Microsoft's power to impinge on consumers' right to repair their own video game equipment, or to have it repaired by a service provider of their choice. Despite making repair-friendly moves in other areas of the consumer electronics industry, Microsoft has continued to lobby hard against right to repair legislation affecting video games consoles."

On the topic of worker's rights, the group said the deal could undermine the ongoing unionization efforts of employees at Activision Blizzard and lead to wage suppression.

"Workers at Activision Blizzard have powerfully mobilized over the past year to shine a light on a workplace culture rife with sexual harassment, gender discrimination, and instances of assault that top management swept under the rug," added the group.

"Now, as those workers seek to form a union to address their collective interests, the potential takeover by Microsoft threatens to further undermine workers’ rights and suppress wages. The fact that none of Microsoft’s US-based employees belong to a union underscores Microsoft’s success in preventing its labor force from organizing to protect worker interest."

The letter has been addressed to FTC chair Lina Khan and three commissioners. It can be read in full on the Public Citizen website.

About the Author(s)

Chris Kerr

News Editor, GameDeveloper.com

Game Developer news editor Chris Kerr is an award-winning journalist and reporter with over a decade of experience in the game industry. His byline has appeared in notable print and digital publications including Edge, Stuff, Wireframe, International Business Times, and PocketGamer.biz. Throughout his career, Chris has covered major industry events including GDC, PAX Australia, Gamescom, Paris Games Week, and Develop Brighton. He has featured on the judging panel at The Develop Star Awards on multiple occasions and appeared on BBC Radio 5 Live to discuss breaking news.

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