Tag: Anti-Competition Issues

Canada’s Banking Sector Needs Increased Competition, Bank of Canada Official Says

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WSJ ProUpdated Oct. 9, 2025 11:40 am ET

OTTAWA—The Bank of Canada’s No. 2 official endorsed a competition shakeup in the highly concentrated financial-services industry, saying the country’s banking sector is an oligopoly and changes could help lift Canada’s prolonged productivity slump.

Carolyn Rogers, the central bank’s senior deputy governor, on Thursday said Canadian authorities have done a stellar job in regulating banks by ensuring they have enough capital to survive shocks such as the 2008-09 financial crisis and the Covid-19 pandemic. “It would also be hard to argue, on any objective measure, that Canada’s banking system is anything other than an oligopoly,” Rogers told a blue-chip Toronto audience.

Copyright ©2025 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

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October 9, 2025
iRobot Stock Plunges as Its Takeover by Amazon Likely Is Dead

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Amazon’s $1.4 billion deal for Roomba-maker iRobot looks set to be blocked by European Union antitrust authorities. It’s only a small setback for the e-commerce giant but it’s a reminder that regulators are still skeptical over acquisitions made by big technology companies.

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January 19, 2024

Microsoft’s Activision Deal Gets Green Light From UK Regulator

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By Kim Mackrael

Microsoft’s acquisition of videogame company Activision Blizzard won approval from U.K. competition authorities, clearing a path for the companies to close the $75 billion deal after a lengthy struggle with regulators.

The U.K.’s Competition and Markets Authority said Friday that the proposed deal no longer poses a major threat to competition in cloud gaming. The shift comes after Microsoft offered to restructure the deal by forfeiting cloud-streaming rights for “Call of Duty” and other popular Activision franchises in much of the world.

-Sarah E. Needleman contributed to this article

Write to Kim Mackrael at Kim.mackrael@wsj.com

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October 12, 2023

Psst: Here’s why Google’s antitrust trial against the Department of Justice isn’t being talked about much

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Google’s top executives have long established a reputation of saying as little as possible on most topics: Earnings calls. Product development plans. Management moves.

Legal matters are certainly on the list, as the company’s antitrust trial with the Justice Department concludes its third week. The public is barred from listening to the 10-week federal trial, and reporters often encounter a courtroom sealed to the public.

Secrecy around the nonjury trial belies the magnitude of the case, the biggest of its kind in tech, if not American business, since the DoJ tangled with Microsoft Corp.
MSFT,
+0.67%
in the 1990s and early 2000s. After years of investigation, the Justice Department claims Google used contracts worth billions of dollars with Apple Inc.
AAPL,
+0.30%
and other phone makers to elbow aside competing search engines that could lead to changes in Google’s business practices — even a breakup of the tech giant.

Google says it makes the best product, and vendors have a choice to work with other search-engine providers. In his opening statement, Google attorney John Schmidtlein said companies and consumers use Google’s popular search engine “because it delivers value to them, not because they have to.”

Asked by MarketWatch to comment further, a company spokesman declined.

Read more: Google spent billions to build an illegal monopoly, Justice Department says as trial gets under way

Alphabet Inc.
GOOGL,
-1.10%

GOOG,
-0.96%,
Google’s parent company, has steadfastly redacted information about the contracts at issue in the case, citing confidential company information, and Google’s lawyers — as well as those at Apple — have consistently asked to seal the courtroom. Before opening statements started on Sept. 12, nearly two-thirds of Google’s motions and responses in the case were sealed, according to the New York Times.

At the same time, criticism has rained on U.S. District Judge Amit Mehta, who has deferred to requests by Google and interested parties like Apple to hold testimony behind closed doors. (On Tuesday, Mehta countered he was relying on federal attorneys to resist persistent attempts by Google and other tech companies to seal the courtroom. He later pushed lawyers to ask more questions in public and wanted to unseal closed-session testimony.)

“A judge’s job isn’t to simply accept a party’s claim that public access to a trial would cause the sky to fall,” The Freedom of the Press Foundation said in a blog post Wednesday.

A cone of silence around such a historic case that could lead to changes to Google’s business practices or a breakup of the company is not surprising, given what is at stake.

“A trial should be open to the public, but there is a balancing act in affording companies some sort of privacy,” lawyer Abiel Garcia said in an interview. “Access to documents does disclose how a company thinks. There is a tension here in how Google wants its users to be transparent about their data, but doesn’t tell you what they are doing.”

Garcia, who presented in a preliminary injunction hearing before Mehta in 2015, said the judge has done an admirable job of respecting Google’s corporate secrets while gradually encouraging more public questioning and disclosures.

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September 29, 2023
Nvidia identified as target of French antitrust raid: WSJ

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Nvidia Corp.’s offices in France were the subject of a dawn raid Wednesday by French antitrust regulators, according to a report by the Wall Street Journal on Thursday, which cited sources close to the raid.

Nvidia
NVDA,
+1.46%
is widely recognized by Wall Street as the biggest chipmaker that stands to gain from the current AI frenzy, as data centers that run the AI models need more and more hardware and software to sustain workloads. Shares of the $1.065 trillion company are up 195% year to date.

On Wednesday, the Autorité de la Concurrence, France’s national competition regulator, said it had carried out the raid at “the premises of a company suspected of having implemented anticompetitive practices in the graphics-cards sector,” and refused to comment on “the entity or on the practices in question.”

Nvidia declined to comment to both the Wall Street Journal and MarketWatch.

Nvidia’s stock closed up 1.5% at $430.89 in Thursday trading following the report, while the S&P 500 index
SPX,
+0.59%
gained 0.6%.

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September 28, 2023
Elizabeth Warren, Bernie Sanders urge FTC’s Khan to finalize controversial merger rules

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A group of Democrats in the House and Senate are imploring the country’s top antitrust enforcement cop to implement sweeping new changes to its merger-review protocol, according to a new letter viewed exclusively by MarketWatch.

The Federal Trade Commission, along with the Justice Department’s antitrust division, recently proposed changes to forms that companies proposing deals of a certain size must submit to the government, which critics say would suppress the market for mergers and acquisitions.

The new form will require companies to provide much more information to antitrust enforcers before they seek to consummate a deal. Most controversially, that would include narrative information about the strategic rationale for a transaction as well as studies, surveys, analyses and reports which were prepared by the company as it considered the deal.

“The new proposed [form] and associated instructions will facilitate efficient premerger review and ensure effective enforcement of antitrust laws,” wrote the lawmakers, including Sens. Elizabeth Warren, a Massachusetts Democrat, and Bernie Sanders of Vermont, an independent who votes with Democrats.

The letter, dated Sept. 27, was also signed by Democrats including Sen. Mazie Hirono of Hawaii, and Reps. Becca Balint of Vermont, Henry Johnson of Georgia, Rashida Tlaib of Michigan, Summer Lee of Pennsylvania, Lori Trahan of Massachusetts, Ilhan Omar of Minnesota, Mark Pocan of Wisconsin, Katie Porter of California and Greg Casar of Texas. No Republicans signed the letter.

The lawmakers lament the state of the U.S. economy today, arguing that the updated premerger process is necessary to combat growing concentration of industry and the digital transformation of the economy.

“Unchecked consolidation hurts consumers, small businesses, workers, and the economy,” the letter reads. “Consolidation leads to higher prices, less innovation, and reduced quality for consumers. It prevents small businesses from entering markets or competing fairly: for example it is twice as expensive for small businesses to borrow money compared to dominant ones, and there are fewer startups in states where a few companies dominate markets.”

The lawmakers note that since the current premerger notification process was instituted nearly 45 years ago, the required forms have not been updated, and only require companies to provide basic information that don’t “give regulators clarity as to whether a deal may substantially lessen competition.”

The FTC and DOJ proposed the changes in July, and then extended the period for accepting public comments on the proposal to Sept. 27, and it’s possible the final rule is amended before the agencies adopt it. There is no set timeline for when the FTC will vote to adopt any changes.

Some antitrust experts are skeptical that the proposed changes will hold up in court, if they are implemented as proposed.

“The proposed changes are likely to face a rocky path ahead,” wrote Justin Hurwitz of the University of Pennsylvania’s Center for Technology, Innovation & Competition, in a recent analysis.

“They appear to violate legislative intent that [the premerger process] not unduly delay transactions or require the production of materials the firms did not already create as par of evaluating the transaction.”

Hurwitz added that “the premerger notification process serves an important function, but it is a tax on on all mergers,” and predicted that the proposed changes will likely not “survive judicial review.”

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September 28, 2023

Microsoft’s Revised Activision Deal Addresses Competition Concerns, Says UK Regulator

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By Elena Vardon

Microsoft’s proposals to modify its $75 billion Activision acquisition address the concerns with the U.K. antitrust authority, the regulator said in a provisional decision Friday.

The U.K. Competition and Markets Authority said that the new deal submitted by Microsoft should lessen any harm to competition in cloud gaming.

The CMA said that the restructured transaction–through which Activision would sell its cloud gaming rights to Ubisoft–opens the door to the deal being cleared.

The regulator is consulting on remedies put forward by Microsoft to address residual concerns it has before making a final decision, it said.

The CMA opened a consultation on these remedies which will last until Oct. 6, it added.

Write to Elena Vardon at elena.vardon@wsj.com

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September 22, 2023

Google spent billions to build an illegal monopoly, Justice Department says as trial gets under way

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Federal prosecutors opened a landmark antitrust trial against Alphabet Inc.’s Google on Tuesday with charges the search-engine giant for years intentionally snuffed competition through exclusive contracts with wireless carriers and phone makers.

Google
GOOGL,
-1.15%
GOOG,
-1.21%
spent billions of dollars on such contracts to cement its dominant position, a clear violation of U.S. antitrust law, prosecutors said.

“This case is about the future of the internet, and whether Google’s search engine will ever face meaningful competition,” Justice Department lawyer Kenneth Dintzer told the court. He said Google pays more than $10 billion a year to Apple Inc.
AAPL,
-1.71%
and other companies to ensure Google is the default or only search engine available on browsers and mobile devices used by millions of consumers.

Google’s search business accounted for more than half of the $283 billion in revenue Alphabet recorded in 2022. Search in large part has fueled the company’s $1.7 trillion market valuation.

Google attorney John Schmidtlein countered that companies and consumers use Google’s popular search engine “because it delivers value to them, not because they have to.”

The legal jousting in a Washington, D.C., federal court kicked off what is expected to be a contentious multiweek trial that could be one of the biggest domestic antitrust trials since the federal government tussled with Microsoft Corp.
MSFT,
-1.83%
in the 1990s. Like that case, this one involves arguments over tying together multiple proprietary products.

To that end, Justice Department officials allege Google’s contracts ensure that Android devices come with Google apps and services, including Google search, preinstalled.

Google Chief Executive Sundar Pichai heads a witness list of senior executives and former employees from Google, Apple, Microsoft and Samsung Electronics Co.
005930,
+1.28%.

“This feedback loop, this wheel has been turning for 12 years, and it always turns to Google’s advantage,” Dintzer said.

Conversely, Schmidtlein said Apple’s decision to make Google the default search engine in its Safari browser underscores that Google’s search engine is the product consumers prefer. “Apple repeatedly chose Google as the default because Apple believed it was the best experience for its users,” he said.

The Google case “could not be more different” from Microsoft litigation in the late 1990s and early 2000s, Schmidtlein asserted. “The evidence will show that Microsoft’s Bing search engine failed to win customers because Microsoft did not invest [and] did not innovate,” he said. “At every critical juncture, the evidence will show that they were beaten in the market.”

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September 12, 2023
U.S. Steel Takeover Talk Rattles Manufacturers

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U.S. Steel Takeover Talk Rattles Manufacturers

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August 15, 2023
China-Founded Rivals Ramp Up War for American Shoppers

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China-Founded Rivals Ramp Up War for American Shoppers

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July 29, 2023
FTC files appeal, again seeks to block Microsoft-Activision deal

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The Federal Trade Commission on Thursday asked an appeals court to temporarily block Microsoft Corp.’s $69 billion acquisition of Activision Blizzard Inc. while it challenges a ruling earlier this week green-lighting the deal.

The FTC on Thursday asked U.S. District Judge Jacqueline Scott Corley to postpone her ruling — which she promptly denied — and also appealed to the Ninth U.S. Circuit Court of Appeals in San Francisco to pause the acquisition “to preserve the status quo” while the case is reviewed, claiming it is likely to succeed in its appeal.

According to the filing, the FTC claims the judge applied the wrong legal standard to its request for a preliminary injunction, and erred in a number of other matters.

The deal is set to close in the coming days, and letting it happen will “irreparably harm the public interest and the FTC,” regulators said.

Also see: GOP blasts FTC Chair Khan as a ‘bully’ after agency’s loss in Microsoft case

In a response filed with the court, Microsoft said the FTC “failed to carry its burden on independent, fact-based grounds” and “dragged its heels” before appealing.

“The court has already found that it would be inequitable” to order an injunction that could lead to “the potential scuttling of the merger,” Microsoft said, in asking for the FTC’s request to be denied.

The FTC has claimed the tie-up of a major videogame platform — Microsoft’s
MSFT,
+1.62%
Xbox — with a major videogame publisher — Activision
ATVI,
-0.51%
makes the wildly popular “Call of Duty,” among other titles — would be harmful to the videogame industry and consumers.

Microsoft has pledged to keep “Call of Duty” available to Sony’s
SONY,
+2.82%
PlayStation console for 10 years, and will make it available for Nintendo’s
7974,
-0.36%
Switch and some cloud-gaming platforms.

In her ruling clearing the deal Tuesday, Corley said the FTC did not show “this particular vertical merger in this specific industry may substantially lessen competition.”

Bloomberg News reported late Thursday that Microsoft and Activision are considering giving up some control of their cloud-gaming business in the U.K. to win approval of British regulators, who — if the U.S. appeals court does not act — are the final hurdle to the deal closing on time.

FTC Chair Lina Khan testified on Capitol Hill on Thursday, where Republican lawmakers assailed her actions and sharply criticized her agency’s court losses in trying to block the Microsoft-Activision deal and Meta’s
META,
+1.32%
acquisition of a virtual-reality gaming company earlier this year.

Read more: After Microsoft defeat, ‘toothless’ FTC needs to pick better battles if it wants to rein in Big Tech

Also: FTC’s probe of OpenAI marks key moment in Khan’s push to rein in Big Tech

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July 13, 2023
FTC will appeal judge’s ruling clearing Microsoft-Activision deal

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The Federal Trade Commission late Wednesday filed notice that it will appeal a judge’s ruling this week that gave Microsoft Corp. the green light to proceed with its $69 billion acquisition of Activision Blizzard Inc.

In a filing with the Ninth Circuit Court of Appeals in San Francisco, the FTC is seeking to overturn U.S. District Judge Jacqueline Scott Corley’s ruling Tuesday, which said the deal would not hurt competition.

“The District Court’s ruling makes crystal clear that this acquisition is good for both competition and consumers,” Brad Smith, Microsoft’s vice chair and president, said in a statement.” We’re disappointed that the FTC is continuing to pursue what has become a demonstrably weak case, and we will oppose further efforts to delay the ability to move forward.”

The FTC has claimed the tie-up of a major videogame platform — Microsoft’s
MSFT,
+1.42%
Xbox — with a major videogame publisher — Activision
ATVI,
-1.09%
makes the wildly popular “Call of Duty,” among other titles — would be harmful to the videogame industry and consumers.

“The facts haven’t changed,” an Activision spokesperson said Wednesday. “We’re confident the U.S. will remain among the 39 countries where the merger can close. We look forward to reinforcing the strength of our case in court, again.”

Microsoft has pledged to keep “Call of Duty” available to Sony’s
SONY,
+1.78%
PlayStation console for 10 years, and will make it available for Nintendo’s
7974,
+1.63%
Switch and some cloud-gaming platforms.

The deal faces a July 18 deadline, and still must gain regulatory approval in the U.K.

Tuesday’s ruling was yet another antitrust setback for the FTC, which has failed to do much to rein in Big Tech, and one analyst told MarketWatch on Tuesday that the regulators need to do ” a much better job of picking their battles,”

Read more: After Microsoft defeat, ‘toothless’ FTC needs to pick better battles if it wants to rein in Big Tech

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July 12, 2023
After Microsoft defeat, ‘toothless’ FTC needs to pick better battles if it wants to rein in Big Tech

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The U.S. Federal Trade Commission’s defeat as it sought to block Microsoft Corp.’s acquisition of videogame maker Activision Blizzard is yet another setback for an increasingly toothless regulator that needs to pick better battles with Big Tech.

On Tuesday morning, a federal judge denied the FTC’s injunction that was seeking to block the software giant’s proposed $69 billion acquisition of Activision
ATVI,
+10.02%,
best known for its hit videogame “Call of Duty.” The FTC argued that Microsoft
MSFT,
+0.19%
could withhold “Call of Duty” and other Activision games from rival console platforms such as Sony’s PlayStation, and keep the games on its Xbox only.

Microsoft, in a show of faith, committed in writing to keep “Call of Duty” on PlayStation on parity with Xbox for 10 years, agreed with Nintendo
7974,
+1.10%
to bring “Call of Duty” to Switch and entered into several pacts to bring Activision content to several cloud gaming services, U.S. District Court Judge Jacqueline Scott Corley noted in her decision.

“With these 10-year contracts that Microsoft made across the board with so many vendors, Nvidia
NVDA,
+0.53%,
Nintendo and others, 10 years is a really long time, in my opinion,” said Sarah Hindlian-Bowler, an analyst at Macquarie Equity Research, in an interview Tuesday. “It is long enough to cover the arrival and maturity of the cloud gaming market….She understands that 10 years is a very long long time to make a guarantee of this kind.”

Also read: Regulators face an antitrust dilemma after Meta launches Threads

Hindlian-Bowler said that she had been in the minority of Wall Street analysts in not believing the U.S. government would be able to block this deal.

“The assumption that this somehow decreases the market is going to prove to be wildly incorrect,” she said, adding that she does not believe that the U.K.’s Competition and Markets Authority will be able to block the deal either.

The latest upset at the FTC was also not too surprising to other Capitol Hill watchers, especially in the light of other high-profile setbacks by the agency and its once-heralded commissioner, Lina Khan. When she was sworn in as chair of the FTC in mid-2021, Khan was hailed as the sheriff who would rein in Big Tech.

“It’s hard to say I am surprised by the ruling because Khan has had a fairly unsuccessful track record,” said Owen Tedford, a senior research analyst at Beacon Policy Advisors. “The regulators are pushing the boundaries, deals that previously would have gone unchallenged have now gone challenged. And they are breaking precedent because Khan and company have expressed a dislike of settlements.”

The FTC’s attempts to sue Meta Platforms Inc.
META,
+1.42%
have had some defeats so far. In February, a California judge denied the FTC’s attempts to block Meta from buying a virtual-reality startup called Within Unlimited. The FTC’s suit to reverse Meta’s acquisitions of WhatsApp and Instagram, filed in 2021, is still plodding along.

Additionally, the FTC recently filed a suit against Amazon.com Inc.
AMZN,
+1.30%,
alleging that it is too difficult for consumers to cancel their Prime accounts, and the agency is reportedly also mulling another far-reaching suit against Amazon alleging that the e-commerce giant punishes merchants who do not use its logistics services. One analyst has already made a case that the FTC will lose that fight too.

“I think that the FTC is in need of some change, in need of some refreshing and in need of doing a much better job of picking their battles,” said Hindlian-Bowler. “This does feel toothless, a lot of the fights they are picking are toothless. And unfortunately, they are missing the real battle. They are missing TikTok, they are missing the real fights where we actually have national security at risk.”

In February, one of the Republican commissioners on the FTC resigned, and wrote an op-ed in the Wall Street Journal accusing Khan of disregarding the rule of law and due process.

Compared to the European Union, which has had far more success implementing regulation to rein in Big Tech, the U.S. is still much weaker. “The EU seems to be having somewhat more success, levying big fines, getting these companies to change,” said Beacon’s Tedford. “The EU has passed these bills, but the U.S., despite these efforts, has not gotten there and is not going to get there for the next two years.”

Money spent by Big Tech to lobby Congress in a huge part of the problem, whereas in Europe, “those lawmakers feel less beholden,” he added.

More than a century ago, President Teddy Roosevelt, known for his “speak softly and carry a big stick” foreign policy, also used his bully pulpit to bust industrial monopolies.

If Khan and her staff want to follow his lead and rein in Big Tech, they need to start picking their future battles more carefully — and carry bigger sticks.

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July 11, 2023
FTC Loses First Bid to Block Microsoft’s Acquisition of Activision Blizzard

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FTC Loses First Bid to Block Microsoft’s Acquisition of Activision Blizzard. The Focus Turns to U.K. Regulators.

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July 11, 2023
Activision’s Microsoft Saga Is Almost Over. It May Be Time to Sell the Stock.

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The fate of

Microsoft

$69 billion purchase of

Activision

Blizzard will finally be known in the coming weeks—and investors may want to consider taking profits on the videogame maker’s stock before then.

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June 30, 2023
Judge temporarily blocks Microsoft’s $69 billion purchase of Activision

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A federal judge late Tuesday approved a request by the Federal Trade Commission to temporarily block Microsoft Corp.’s $69 billion acquisition of Activision Blizzard Inc.

U.S. District Judge Edward Davila in San Francisco issued a temporary restraining order in order to “maintain the status quo,” and set a evidentiary hearing to be held June 22-23 on whether a preliminary injunction should be issued.

The deal was set to be finalized as soon as this Friday. Tuesday’s order said the deal may not close until at least five days after the court’s preliminary injunction ruling.

The acquisition has raised antitrust concerns that Microsoft
MSFT,
+0.74%,
with its Xbox gaming console, could withhold hit Activision Blizzard
ATVI,
+1.17%
videogame franchises such as “Call of Duty” and “Overwatch” from competing console platforms.

On Monday, the FTC filed for a restraining order and injunction to block the deal, arguing “a preliminary injunction is necessary to maintain the status quo and prevent interim harm to competition.”

“This loss of competition would likely result in significant harm to consumers in multiple markets at a pivotal time for the industry,” the FTC said in its filing Monday.

In a statement Tuesday evening, a Microsoft spokesperson said: “Accelerating the legal process in the U.S will ultimately bring more choice and competition to the gaming market. A temporary restraining order makes sense until we can receive a decision from the court, which is moving swiftly.”

While EU regulators approved the deal in May, British regulators have tentatively scheduled appeal hearings after saying in April they would prohibit the purchase.

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June 13, 2023
Silicon Valley Confronts the End of Growth. It’s a New Era for Tech Stocks.

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Silicon Valley could use a reboot. The biggest players aren’t growing, and more than a few are seeing sharp revenue declines. Regulators seem opposed to every proposed merger, while legislators push for new rules to crack down on the internet giants. The Justice Department just can’t stop filing antitrust suits against Google. The initial public offering market is closed. Venture-capital investments are plunging, along with valuations of prepublic companies. Maybe they should try turning the whole thing on and off.

The only strategy that seems to be working is to lay people off. Tech CEOs suddenly are channeling Marie Kondo, tidying up and keeping only the people and projects that “spark joy,” or at least support decent operating margins. Layoffs.fyi reports that tech companies have laid off more than 122,000 people already this year.

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March 3, 2023
Feds poised to file another antitrust suit against Google this week: report

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The U.S. Justice Department is preparing to sue Alphabet Inc. in the coming days over its dominance in the online ad market, according to a report late Monday.

Citing sources familiar with the matter, Bloomberg News reported the antitrust suit is expected to be filed in federal court before the end of this week, and as soon as Tuesday.

The pending filing has been rumored for months, after the Justice Department reportedly rejected concessions offered by Google last summer. A Google spokesperson declined to comment Monday.

Google dominates the online ad market, earning more than one-quarter of U.S. digital-advertising revenue, according to estimates from research firm Insider Intelligence Inc.

It would be the second antitrust suit filed by the Justice Department against Google parent Alphabet. In October 2020, the DOJ accused Google of being “a monopolist in the general search services, search advertising, and general search text advertising markets.” In a 2020 blog post, Google called that suit “deeply flawed” and said people use Google because they choose to, not because they are forced to. That case is set for trial in the fall.

Alphabet faces a number of other lawsuits targeting its business practices, including a $16.3 billion class-action suit filed in the U.K. in November accusing the tech giant of reaping “super profits” at the expense of thousands of smaller companies. Google called that lawsuit “speculative and opportunistic.”

Alphabet’s Class A shares
GOOGL,
+1.81%
are down 24% over the past 12 months while its Class C shares
GOOG,
+1.94%
have fallen about 22%, compared to the S&P 500’s
SPX,
+1.19%
9% dip over the past year. Both classes of Alphabet shares dipped nearly 1% in after-hours trading Monday after the Bloomberg report was published.

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January 23, 2023
FTC sues to block Microsoft’s $69 billion acquisition of game giant Activision Blizzard

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The Federal Trade Commission on Thursday sued Microsoft Corp. to block its $69 billion deal to buy Activision Blizzard Inc.

The acquisition, which would be Microsoft’s
MSFT,
+1.07%
largest and the biggest ever in the video gaming industry, would “enable Microsoft to suppress competitors to its Xbox gaming consoles and its rapidly growing subscription content and cloud-gaming business,” the FTC claimed.

“Microsoft has already shown that it can and will withhold content from its gaming rivals,” Holly Vedova, director of the FTC’s Bureau of Competition, said in a statement. “Today we seek to stop Microsoft from gaining control over a leading independent game studio and using it to harm competition in multiple dynamic and fast-growing gaming markets.”

FTC members pointed to Microsoft’s record of “acquiring and using valuable gaming content to suppress competition from rival consoles,” including its acquisition of ZeniMax, parent company of Bethesda Softworks.

Microsoft President Brad Smith indicated the software giant will fight the lawsuit. In a statement, he said Microsoft has “been committed since Day One to addressing competition concerns.”

“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,” Smith said.

Activision CEO Bobby Kotick, in a statement, said the suit “sounds alarming, so I want to reinforce my confidence that this deal will close. The allegation that this deal is anti-competitive doesn’t align with the facts, and we believe we’ll win this challenge.”

Still, In recent weeks Microsoft has taken steps to demonstrate to regulators its acquisition of Activision would not give it an unfair advantage in the gaming market. On Tuesday, Microsoft said it would bring the “Call of Duty” franchise to Nintendo Co.’s
7974,
-1.31%
Switch, a rival of Microsoft Xbox, and Microsoft has said it would make Call of Duty available on rival Sony Group Corp.’s
SONY,
-0.06%
PlayStation.

“It’s a bad idea,” Geoffrey Manne, president of the International Center for Law and Economics, said of the FTC’s lawsuit vs. Microsoft. “There may be markets in which some activities of some of these large tech companies cause concerns, but when they are expanding into new markets or enhancing competition in markets where they aren’t leaders, we should be encouraging them, not threatening them with lawsuits.”

The government’s action in administrative court marks the first serious regulatory threat to Microsoft’s business in more than two decades, when the Justice Department brought a landmark antitrust lawsuit against the software giant that took years and was settled in 2002. Since then, Microsoft had sidestepped antitrust scrutiny and Smith in particular has focused the glare on its tech rivals Amazon.com Inc.
AMZN,
+2.24%,
Apple Inc.
AAPL,
+1.19%,
Alphabet Inc.’s
GOOGL,
-0.94%

GOOG,
-0.89%
Google, and Facebook parent company Meta Platforms Inc.
META,
+1.26%.

Read more: Microsoft’s shadowy presence in antitrust push is angering the rest of Big Tech

Shares of Microsoft are up 1% in trading Thursday. Activision’s
ATVI,
-1.33%
stock is down 1.5%.

The FTC’s lawsuit comes the same day it is heading to court in San Jose, Calif., in what is expected to be a three-week trial to bloc Meta’s $300 million acquisition of VR fitness app maker Within.

The trial is likely to showcase an intriguing look at the agency’s ability to stifle alleged anticompetitive conduct using largely untested legal theories at a time when Congress is sitting on tech antitrust legislation.

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December 8, 2022