The US Federal Trade Commission filed a lawsuit on Thursday to halt Microsoft’s $69 billion takeover of gaming behemoth Activision Blizzard, maker of the hit “Call of Duty” game, citing fears that it would hinder competition.
The case is one of the most major interventions by the US government to halt consolidation in the computer industry, and it casts serious doubt on the transaction’s future.
“Today, we aim to prevent Microsoft from obtaining control of a leading independent game company and using it to undermine competition in many dynamic and fast-growing gaming areas,” said Holly Vedova, head of the FTC’s Bureau of Competition.
The move by Washington follows an intervention by the European Union, which started an in-depth investigation into the transaction due to concerns that the agreement would see Activision Blizzard’s blockbuster games become exclusive to Microsoft, the maker of the Xbox console.
Britain has also announced an “in-depth probe” into Microsoft’s proposed merger with Activision, which also creates the mobile game “Candy Crush.”
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Microsoft announced the merger in January, creating the world’s third-largest gaming company by revenue.
According to the FTC, Microsoft has a history of acquiring smaller gaming companies only to make the game’s proprietary to Microsoft and hence inaccessible to competitors such as Nintendo or Sony.
Microsoft announced earlier this week that it would bring the “Call of Duty” brand to the Nintendo Switch, a competitor of Xbox.
This comes on the heels of a previous move to make “Call of Duty” available on Sony’s PlayStation.
“We continue to believe that this transaction will increase competition and provide more options for gamers and game creators,” Microsoft President Brad Smith said in a statement.
“While we believe in giving peace a chance, we have total confidence in our case and appreciate the opportunity to present it in court.”