The FTC requested a preliminary injunction to stop Microsoft’s (MSFT.O) acquisition of Activision Blizzard (ATVI.O).
“If this deal is completed, the combined company… is likely to have the ability, an incentive, to harm competition in various markets related to consoles, subscription services and the cloud (for gaming),” FTC lawyer James Weingarten said in the government’s opening arguments on the first day of a five-day evidentiary hearing.
The FTC wants a judge to block Microsoft and Activision Blizzard’s $69 billion merger until its in-house court rules on video game competition.
The FTC argues the combination would give Microsoft’s Xbox exclusive access to Activision titles, barring Nintendo (7974.T) and Sony Group Corp.’s (6758.T) PlayStation.
“I think you will see that every piece of evidence shows that it only makes sense for Xbox to make these Activision games available to as many people on as many platforms as possible,” Microsoft lawyer Beth Wilkinson said in opening statements. Injunctions can lead to three-year administrative proceedings that destroy deals.
Phil Spencer, Jamie Lawver, Dov Zimring, and Sony Interactive Entertainment CEO Jim Ryan will testify by video deposition on Friday.
Microsoft and Activision have filed antitrust complaints globally to complete the deal, including the U.S. In April, British competition authorities blocked Microsoft’s “Call of Duty” acquisition.
The FTC believes the purchase will give Microsoft the “ability and increased incentive to withhold or degrade Activision’s content in ways that substantially lessen competition.”
Microsoft said a 10-year consent settlement with the FTC to provide “Call of Duty” games to rivals would benefit players and gaming firms.
The hearing ends on June 29. Satya Nadella and Bobby Kotick will testify next week.