The Federal Trade Commission said on Thursday it has filed an antitrust case against Microsoft to challenge the software maker’s attempt to acquire video game publisher Activision Blizzard, claiming it would violate U.S. law.
This isn’t Microsoft’s first time dealing with competitive pressure. In 1998 the U.S. Justice Department filed a broad antitrust case against the company. Microsoft changed some practices related to its Windows operating system business as a result. Regulators in the United Kingdom are looking into whether the Activision Blizzard acquisition would lessen competition in the country.
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Microsoft announced plans to acquire Activision Blizzard for $68.7 billion in January, with the goal of closing it by June 2023. The deal has come under pressure from Microsoft’s competitors in gaming, such as Sony. Microsoft has repeatedly said it won’t be the world’s leader in gaming if the deal were to close, and it has vowed to provide popular “Call of Duty” games on gaming platforms other than those owned by Microsoft.
“We continue to believe that this deal will expand competition and create more opportunities for gamers and game developers,” Brad Smith, Microsoft’s vice chair and president, said in a statement. “We have been committed since Day One to addressing competitive concerns, including by offering earlier this week proposed concessions to the FTC. While we believed in giving peace a chance, we have complete confidence in our case and welcome the opportunity to present our case in court.”
FTC commissioners voted 3-1 to move forward with the agency’s administrative complaint, which will go before the FTC’s internal administrative law judge. In that process, the ALJ makes an initial decision after a trial-like proceeding. The respondent or FTC staff serving as “complaint counsel” can choose to appeal the initial decision to the full commission for a vote. After that, the respondent could still ask a federal appeals court to review the commission’s order.
“With control of Activision’s content, Microsoft would have the ability and increased incentive to withhold or degrade Activision’s content in ways that substantially lessen competition — including competition on product quality, price, and innovation,” the FTC said in its complaint. “This loss of competition would likely result in significant harm to consumers in multiple markets at a pivotal time for the industry.”
In the statement, the FTC said Microsoft has a record, including with its 2021 ZeniMax deal, of buying games and using the moves to suppress competition from other companies that make consoles. Microsoft promised the European Commission antitrust officials that the company wouldn’t have an incentive to stop people from playin ZeniMax games on consoles other than the Xbox, but after the European Commission permitted the deal to proceed, Microsoft announced that it was making ZeniMax games such as Elder Scrolls VI, Redfall and Starfield into exclusives, the FTC said in its suit.
The FTC said Activision Blizzard has brought its games to a variety of devices, irrespective of their manufacturers, but that might change if Microsoft were to complete the deal. Microsoft could adjust prices or worsen the experience on competing hardware such as Sony PlayStation consoles, or keep Activision Blizzard consoles from reaching consoles other than Microsoft Xbox systems, the agency said.
Microsoft does offer titles that are exclusive to the Xbox, and in October Phil Spencer, CEO of gaming at Microsoft, pointed out that Sony has its own set of exclusive franchises, but over time Microsoft has brought games such as Minecraft to other devices. He argued that it’s important for more people, not less, to play games the company owns.
Microsoft is seeking to add subscribers to its Game Pass service that provides access to hundreds of games. The Game Pass Ultimate subscription tier also allows people to play games that stream from Microsoft data centers on a variety of devices, including smartphones.
The FTC said in its case that the proposed acquisition is reasonably likely to reduce competition or bring about monopolies in the markets for gaming subscription services, cloud gaming and high-performance consoles.
“We want Call of Duty to be enjoyed by more players around the world. That requires COD being on diverse platforms after the merger of Microsoft + Activision Blizzard,” Lulu Cheng Meservey, Activision’s executive vice president for corporate affairs and communications chief, said in a tweet.
The lawsuit represents a major milestone for FTC Chair Lina Khan, who has long signaled aggressive action on tech. While her tenure has included a lawsuit seeking to block Facebook owner Meta from acquiring a virtual reality fitness app developer, the lawsuit seeking to block the Microsoft-Activision deal is notable for its scale, as the largest technology transaction to date.
Khan and her counterpart at the Justice Department’s antitrust division, Jonathan Kanter, have said they want the agencies to become more comfortable with taking big swings, adding that a high win record in court likely means they aren’t challenging enough cases.
Federal enforcers have seen a string of losses in merger challenges in recent months, with the exception of one significant win by the Department of Justice in its case against Penguin Random House’s proposed acquisition of Simon & Schuster.
The FTC’s administrative law judge rejected the commission’s challenge of Illumina’s proposed acquisition of Grail in the biotech space, though the FTC said it will appeal that ruling. The Antitrust Division has also said it’s appealing or considering appealing the three merger cases it lost so far: UnitedHealth Group-Change Healthcare, US Sugar-Imperial Sugar and Booz Allen Hamilton-EverWatch.
Smith previewed Microsoft’s arguments against blocking the deal in a Wall Street Journal opinion piece published earlier this week, saying it would be a “huge mistake.”
“Microsoft faces huge challenges in the gaming industry,” Smith wrote, adding that its Xbox console gaming system is in third place behind Sony’s PlayStation and the Nintendo Switch. Microsoft also has “no meaningful presence in the mobile game industry,” he said. He pointed attention toward Apple and Google, saying that while mobile gaming is a fast growing and high revenue segment, those two app store operators take a “significant portion” of those earnings through their fees on developers.
Activision Blizzard does have a place on mobile devices thanks to its 2016 acquisition of King, which publishes the Candy Crush Saga game. The Candy Crush franchise has over 200 million monthly active users, Activision Blizzard said in November.
Smith noted that Microsoft’s purchase of Activision would let it compete effectively in the gaming industry, spurring innovation and helping customers. He downplayed concerns voiced by competitors such as Sony, saying the company is “as excited about this deal as Blockbuster was about the rise of Netflix.”
Activision Blizzard shares reached a session low of $73 per share after the FTC announced its case. Microsoft had agreed to pay $95 per share.
Bobby Kotick, Activision Blizzard’s CEO, told employees in a memo that the assertion that the deal is anti-competitive doesn’t match with the facts.
“Simply put, a combined Microsoft-ABK will be good for players, good for employees, good for competition and good for the industry,” he wrote. “Our players want choice, and this gives them exactly that.”
Politico reported last month that the FTC was likely to try to block the deal.
Elon Musk listens as reporters ask U.S. President Donald Trump and South Africa President Cyril Ramaphosa questions during a press availability in the Oval Office at the White House on May 21, 2025 in Washington, DC.
Chip Somodevilla | Getty Images
Tesla shares gained about 5% on Tuesday after CEO Elon Musk over the weekend reiterated his intent to home in on his businesses ahead of the latest SpaceX rocket launch.
The billionaire wrote in a post to his social media platform X that he needs to be “super focused” on X, artificial intelligence company xAI and Tesla as they launch “critical technologies” on the heels of a temporary outage.
“As evidenced by the uptime issues this week, major operational improvements need to be made,” he wrote, adding that he would return to “spending 24/7” at work. “The failover redundancy should have worked, but did not.”
An outage over the weekend briefly shuttered the social media platform formerly known as Twitter for thousands of users, according to DownDetector. Earlier in the week, the platform suffered a data center outage. X has suffered a series of outages since Musk purchased the platform in 2022.
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Musk has previously indicated plans to step away from his political work and prioritize his businesses.
During Tesla’s April earnings call he said that he would “significantly” reduce his time running President Donald Trump‘s Department of Government Efficiency.
In the last election cycle, Musk devoted time and billions of dollars to political causes and toward electing Trump in 2024. However, a story over the weekend from the Washington Post, citing sources familiar with the matter, said that Musk has grown disillusioned with politics and wants to return to managing his businesses.
Last week, Musk said in an interview at the Qatar Economic Forum that he planned to spend “a lot less” on campaign donations going forward.
The comments from Musk precede SpaceX’s Starship rocket Tuesday evening. Pressure is on for the company after two Starship rockets exploded in January and March.
Ahead of the launch, Musk announced an all hands livestream on X at 1 p.m.
Tesla is still facing fallout from Musk’s political foray, with protests at showrooms and other brand damage.
In April, Tesla sold 7,261 cars in Europe, down 49% from last year, according to the European Automobile Manufacturers’ Association.
National Economic Council Director Kevin Hassett said Tuesday that the Trump administration does not want to “harm Apple” with tariffs.
“Everybody is trying to make it seem like it’s a catastrophe if there’s a tiny little tariff on them right now, to try to negotiate down the tariffs,” Hassett told CNBC’s “Squawk Box” on Tuesday. “In the end, we’ll see what happens, we’ll see what the update is, but we don’t want to harm Apple.”
Hassett’s comments come after President Donald Trump said in a social media post that Apple will have to pay a tariff of 25% or more for iPhones made outside the U.S. Apple has historically manufactured its products in foreign countries including China, India and Vietnam.
“I have long ago informed Tim Cook of Apple that I expect their iPhone’s that will be sold in the United States of America will be manufactured and built in the United States, not India, or anyplace else,” Trump wrote in the post. “If that is not the case, a Tariff of at least 25% must be paid by Apple to the U.S. Thank your for your attention to this matter!”
By some estimates, a U.S.-made iPhone could cost as much as $3,500.
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“If you think that Apple has a factory some place that’s got a set number of iPhones that it produces and it needs to sell them no matter what, then Apple will bear those tariffs, not consumers, because it’s an elastic supply,” Hassett said.
Hasset’s comments continue the administration’s push to pressure companies to shoulder the cost burden of Trump’s tariffs, instead of raising prices for consumers.
Earlier this month, Trump told retail giant Walmart to “EAT THE TARIFFS” after the company warned it would have to pass those added costs on.
Shares of Apple were up more than 1% Tuesday.
Apple did not immediately respond to CNBC’s request for comment.
Dr. Priti Patel, CMIO at John Muir Health, uses Ambience before starting a patient encounter.
Courtesy of Ambience Healthcare
Artificial intelligence startup Ambience Healthcare on Tuesday announced a new medical coding model that outperforms doctors by 27%.
Ambience uses AI to draft clinical notes in real-time as doctors consensually record their visits with patients. The company used tools from OpenAI to build the new model.
The startup is part of a fiercely competitive market that has taken off as health-care executives search for solutions to help reduce staff burnout and daunting administrative workloads.
The company’s new model can listen to patient encounters and identify ICD-10 codes, which are internationally standardized classifications for different diseases and conditions. There are about 70,000 ICD-10 codes that are regularly updated and used to facilitate billing and other reporting processes in health care.
Ambience said its new ICD-10 model can reduce billing mistakes and help clinicians and professional coders work more efficiently. The model notched a “27% relative improvement over physician benchmarks,” according to a release on Tuesday.
“We’re not replacing doctors or coders,” Brendan Fortuner, Ambience’s head of engineering, told CNBC in an interview.“What we’re doing is we’re liberating them from administration, and we’re fixing mistakes that help make health care better, safer, more cost-effective.”
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Documenting ICD-10 codes has traditionally been a labor-intensive task in health care, but it’s a crucial way to track outcomes, mortalities and morbidities in a standardized way, said Dr. Will Morris, the chief medical officer of Ambience.
“If you think about it from a data perspective, it’s how you can compare and contrast clinician A to B, or health system A to B,” Morris said in an interview. “It’s the cornerstone for quality.”
Ambience’s technology is used at more than 40 health-care organizations, like Cleveland Clinic and UCSF Health. It has raised more than $100 million, according to PitchBook, from investors including Kleiner Perkins, Andreessen Horowitz and the OpenAI Startup Fund.
The company is reportedly seeking fresh capital at a valuation of over $1 billion, according to a report from The Information. Ambience declined to comment on the report.
Ambience trained its new AI model using OpenAI’s reinforcement fine-tuning technology. This technology allows companies to tune OpenAI’s best reasoning models for very specific domains, like health care.
To validate the model, Ambience tested it against a “gold panel” set of labels, the company said. The labels were established by a group of expert clinicians who evaluated complex clinical cases and came to an agreement on what the right codes were.
Ambience’s AI platform for compliant documentation, CDI, and coding.
Courtesy of Ambience Healthcare
The company then recruited 18 different board-certified doctors and compared their performance on ICD-10 coding accuracy to the model’s performance. That comparison showed the Ambience technology performed 27% better than the physician baseline.
“It shows for the first time that an AI system can actually surpass clinician experts at a very, very important administrative task, especially in coding,” Fortuner said.
Ambience already has similar capabilities available for other medical codes like Current Procedural Terminology (CPT) codes, and Fortuner said it’s exploring how to tackle other areas like prior authorizations, utilization management and clinical trial matching.
The company’s new ICD-10 model will roll out to customers over the summer.
“Getting it right at the point of care is a fundamental change,” Morris said.