FTC sues to block Microsoft’s acquisition of Activision Blizzard
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.
Intel CEO Lip-Bu Tan makes a speech on stage in Taipei, Taiwan May 19, 2025.
Ann Wang | Reuters
President Donald Trump said Monday that he and members of his cabinet met with Intel CEO Lip-Bu Tan, days after he called on the head of the chipmaker to resign. Intel shares rose 2% in extended trading.
“I met with Mr. Lip-Bu Tan, of Intel, along with Secretary of Commerce, Howard Lutnick, and Secretary of the Treasury, Scott Bessent,” Trump wrote in a post on Truth Social. “The meeting was a very interesting one. His success and rise is an amazing story. Mr. Tan and my Cabinet members are going to spend time together, and bring suggestions to me during the next week. Thank you for your attention to this matter!”
An Intel spokesperson confirmed the meeting.
“Earlier today, Mr. Tan had the honor of meeting with President Trump for a candid and constructive discussion on Intel’s commitment to strengthening U.S. technology and manufacturing leadership,” the spokesperson wrote in an email.
Tan has been an Intel director since 2022, and in March he replaced Pat Gelsinger as CEO. Last week Sen. Tom Cotton, R-Ark., questioned Tan’s ties to China. Cotton brought up a past criminal case involving Cadence Design, where Tan had been CEO, and asked whether Intel required Tan to divest from positions in chipmakers linked to the Chinese Communist Party, the People’s Liberation Army and any other concerning entities in China.
Trump’s latest message marks a stark change in tone from last week. In a Truth Social post on Thursday, the president wrote that Tan “is highly CONFLICTED and must resign, immediately. There is no other solution to this problem.”
Intel said in a comment later that day that the company, directors and Tan are “deeply committed to advancing U.S. national and economic security interests.”
The Trump administration has taken a heavy hand in the business world, particularly in the semiconductor market, as the U.S. battles with China for supremacy in artificial intelligence. Over the weekend, Nvidia agreed to pay the federal government a 15% cut in return for receiving export control licenses that will allow it to once again sell its H20 chip to China and Chinese companies. Nvidia CEO Jensen Huang visited Trump in the White House on Friday.
President Trump on Monday said that he initially asked Nvidia for a 20% cut of the chipmaker’s sales to China, but the number came down to 15% after Huang negotiated with him.
“I said, ‘listen, I want 20% if I’m going to approve this for you, for the country,'” Trump said at a news conference in Washington, D.C.
Tan, 65, took over Intel after the struggling chipmaker had failed to gain significant traction in the AI market, which Nvidia dominates, while it was burning cash to build its foundry business for chip manufacturing.
Tan was born in Malaysia and raised in Singapore before moving to the U.S. and receiving a master’s degree from the Massachusetts Institute of Technology. He said in late July that his first few months as Intel’s CEO had not been easy, with layoffs and cuts to the foundry division.
Intel canceled plans for manufacturing sites in Germany and Poland and would slow down development in Ohio, he told employees.
“Turning the company around will take time and require patience,” Tan said on a conference call with analysts in July. “We have a lot to fix in order to move the company forward.”
Intel shares are up 3% this year as of Monday’s close. The S&P 500 is up 8.4%.
— CNBC’s Fred Imbert contributed to this report.
Technology
StubHub IPO is back on for September after ticketing company delayed plans on tariff concerns
StubHub, the ticketing marketplace that spun out of eBay in 2020, has resumed its plans to go public and is now aiming to hold its IPO next month, CNBC has learned.
The company originally paused its IPO plans in April as the stock market was reeling from President Donald Trump’s “liberation day” tariffs. The decision came after StubHub submitted its prospectus in March indicating it would list on the New York Stock Exchange under the ticker “STUB.”
StubHub now expects to kick off its IPO roadshow after Labor Day, Sept. 1, and make its debut later in the month, according to a source familiar with the matter who asked not to be named because the discussions are confidential.
The company didn’t immediately respond to a request for comment.
StubHub also filed an updated IPO prospectus on Monday. It reported revenue growth in the first quarter of 10% from a year earlier to $397.6 million. Operating income came in at $26.8 million for the period, after the company lost $883,000 in the year-ago period, but its net loss widened to $35.9 million from $29.7 million a year ago.
The IPO market has come to life in recent months after an extended dry spell due to high inflation and rising interest rates. A flurry of startups have made their public debuts, including rocket maker Firefly Aerospace, design software company Figma, crypto firm Circle and AI infrastructure provider CoreWeave. Bullish, the cryptocurrency exchange that counts Peter Thiel as an investor, also filed its IPO prospectus last month.
StubHub has been a longtime player in the ticketing industry since its launch in 2000. It was purchased by eBay for $310 million in 2007, but was reacquired by its co-founder Eric Baker in 2020 for $4 billion through his new company Viagogo.
The company had sought a $16.5 billion valuation before it began the IPO process, CNBC previously reported. StubHub didn’t provide an expected pricing range for its shares in the filing.
As it prepares to go public, StubHub is contending with hefty competition in the online ticketing market. In addition to Ticketmaster, which is owned by Live Nation, StubHub is up against secondary market companies, including Vivid Seats, SeatGeek and TicketNetwork
For the first quarter, StubHub reported gross merchandise sales of $2.08 billion, up 15% from a year prior. That was a slowdown from 47% expansion the previous quarter. StubHub said GMS, or the total value paid by buyers for tickets and fulfillment, builds in each quarter and that initial sales for major concert tours typically occur near the end of the year.
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