Microsoft-Activision deal: Gamers sue to stop merger

Call of Duty promotion in US

Microsoft faces legal action from 10 gamers to block its merger with Call of Duty maker Activision Blizzard.

The lawsuit filed in a US federal court says the $69bn (£56bn) deal by the Xbox console maker to purchase its rival will "create a monopoly in the video game industry".

The complaint comes two weeks after US regulators filed a case with an administrative judge to block the deal.

The merger would be the largest tech deal ever in the video gaming market.

The proposed acquisition would give Microsoft "far-outsized market power in the video game industry," according to the complaint "with the ability to foreclose rivals, limit output, reduce consumer choice, raise prices, and further inhibit competition."

However, Microsoft is defending the proposed acquisition. "This deal will expand competition and create more opportunities for gamers and game developers as we seek to bring more games to more people," according to a spokesman.

Almost two weeks ago, the Federal Trade Commission (FTC) raised similar concerns in their complaint. The US business watchdog said Activision was one of a small number of top video game developers that made high-quality games for multiple devices.

The proposed acquisition would give Microsoft "both the means and motive to harm competition" by manipulating pricing, making games worse on its competitors' video game consoles, "or withholding content from competitors entirely, resulting in harm to consumers," the agency said in a press release.

After the FTC filed its lawsuit, Microsoft president Brad Smith said the company had "complete confidence in our case and welcome the opportunity to present our case in court".

Microsoft also announced it will make Call of Duty available on Nintendo for 10 years if the purchase went through and made a similar offer to rival Sony which makes the PlayStation console.

"This sounds alarming, so I want to reinforce my confidence that this deal will close," Activision Blizzard chief executive Bobby Kotick wrote in a letter to staff that was shared on the company's website. "The allegation that this deal is anti-competitive doesn't align with the facts, and we believe we'll win this challenge."

This has become one of the most-high profile legal fights to emerge from US President Joe Biden's pledge to take a harder line against monopolies.

The takeover, which was announced in January, also faces legal action in the European Union and the UK.

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