Gamers Sue Microsoft to Stall Activision Acquisition
The gamers filed their lawsuit Tuesday in San Francisco’s Superior Court, according to Bloomberg Law. The group of 10 alleges that absorbing Activision would “give Microsoft far-outsized market power in the video game industry,” potentially resulting in the foreclosure of its rivals, higher console and game prices, and fewer choices for consumers.
Their lawsuit is made possible through the Clayton Antitrust Act of 1914, a landmark federal antitrust law. Section 16 of the Clayton Act authorizes Americans to sue businesses for price discrimination and anticompetitive business practices. Though other businesses are often thought to be the main victims of industry monopolization, the Clayton Act maintains that consumers are likewise affected and offers the opportunity to demonstrate that impact in court. According to the group behind Tuesday’s lawsuit, Microsoft’s pending Activision purchase violates Section 7 of the Clayton Act due to its monopolization risk alone.
The gamers who filed the lawsuit note that the gaming industry was already beginning to shut out smaller developers and publishers at an alarming rate prior to Microsoft’s initial Activision bid. They allege that last year’s 1,159 mergers, which tripled 2020’s acquisition count, prove the market is rapidly consolidating in a way that boosts major players’ power while shutting out industry upstarts. This has been a larger topic of contention for the Microsoft-Activision merger’s critics, who worry that the acquisition—which would make Microsoft the world’s third-largest video game company—would feed into a Disney-esque buy-up of the industry’s key brands.
“The proposed acquisition of Activision Blizzard by Microsoft is part of a dramatic wave of consolidation and stands to further lessen competition and harm consumers,” the lawsuit reads. “The merger follows a long history of concentration in the markets by both Microsoft and Activision Blizzard and may serve to further consolidate power in the gaming industry.”
Microsoft has flat-out disagreed with the gamers’ stance, telling Bloomberg that the merger would “expand competition and create more opportunities for gamers and game developers.”
The gamers’ legal stand comes just weeks after the US Federal Trade Commission (FTC) sued Microsoft in a similar attempt to block the transaction, which has overall been a source of controversy for several months.
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