The FTC reportedly sued Microsoft to stop European bargaining

A new report from Bloomberg says the FTC lawsuit against the Microsoft-Activision deal happened to try and preempt the European Competition Commission’s decision to discuss remedies – solutions to the objections the commission raised about the acquisition. People familiar with the FTC’s decision, but unauthorized to speak publicly, told Bloomberg the lawsuit came as a surprise, since no one expected the FTC to act until later in spring.

These sources say that FTC Chair Lina Khan filed the suit after a call with European commissioners, who said they intended to start talks with Microsoft about ways the tech company could resolve the issues raised against the acquisition. Despite the topic of remedies coming up in the call, Bloomberg’s sources say the European Competition Commission didn’t intend to start these talks with Microsoft until later in spring 2023.

The reason was reportedly to “send a strong message” to the European Commission about the FTC’s stance on the matter, a stance in line with Khan’s previous commitment to scrutinizing significant mergers in the tech space more closely. 

Both agencies are set to issue a ruling in April, after formally submitting a statement of objections that outlines their concerns over the acquisition, including the possibility of harming competition in cloud and subscription services and adverse effects on the games industry’s nascent labor movement.

While Activision Blizzard remains embroiled in controversy over its handling of labor issues in Blizzard Albany and Raven Studio, Microsoft recently recognized the first union under its umbrella, after quality assurance workers at ZeniMax voted to organize.

Written by Josh Broadwell on behalf of GLHF