With the US Federal Trade Commission's lawsuit against Microsoft just getting off the ground, the company's Activision Blizzard acquisition now faces another legal battle with an underdog opponent: a bunch of gamers.
As the Joseph Saveri antitrust law firm explains, on December 20 it and the Alioto Law Firm filed a private lawsuit in the US District Court for the Northern District of California "on behalf of plaintiffs who would be adversely affected by reduced competition in the video game industry as a consequence of the Microsoft and Activision merger." The private lawsuit lists 10 plaintiffs who've filed as a group, and they're all a bunch of regular-old gamers – from California, New Mexico, and New Jersey – with a bone to pick with Microsoft.
The gist of the lawsuit is about what'd you'd expect: these plaintiffs allege that this deal would reduce competition in the games industry and give Microsoft the ability to "foreclose rivals, limit output, reduce consumer choice, raise prices, and further inhibit competition." This echoes much of the FTC's argument regarding anti-competitive concerns and market dominance.
"Competition rather than combination is the rule of trade in the United States so that these Plaintiffs, and the public at large, may enjoy the benefits and innovations that come from competition, including, among others, improved quality and increased choices at the lowest possible prices," the lawsuit reads.
"Nothing has been as destructive to the free enterprise system as the mega-mergers of the last two to three decades," attorney Joseph Alioto argues in a statement. "They destroy jobs; they raise prices; they cause quality to diminish and innovation to be stifled. In this case, one of the largest companies in the world is trying to eliminate its significant rival in the game industry instead of competing."
"This case represents a necessary step in preserving competition in the video game industry and protecting the consumer benefits and innovations that competition brings," adds Joseph Saveri.
Will this lawsuit stop Microsoft's deal? Almost certainly not. The FTC is currently the acquisition's biggest obstacle, while this is more of a class action-adjacent situation that Microsoft could probably stamp out or simply pay off before it gets too deep into the courts. That said, it is interesting to see a group of consumers wield anti-competitive concerns in this way, and I wouldn't be surprised if we see more small lawsuits like this pop up in the months ahead, and the outcome of this one could set a precedent there.
Activision CEO Bobby Kotick is confident in the deal despite the FTC's lawsuit.
