What happened
Shares of Microsoft (MSFT 0.14%) fell 2.3% on Monday following reports of increased antitrust scrutiny.
So what
The Federal Trade Commission (FTC) may move to block Microsoft's $69 billion acquisition of video game maker Activision Blizzard (ATVI +0.00%), according to a report published by Politico after the market close on Wednesday. Regulators are reportedly skeptical of the two companies' claims that the deal will not dampen competition in the nearly $200 billion gaming market. The FTC could bring an antitrust lawsuit against Microsoft as soon as December.
The tech titan's rivals could spur regulators to act. Sony (SONY 3.37%) notes that by acquiring Activision, Microsoft would gain control over popular game franchises like Call of Duty. It could then choose to make these and other games exclusive to its Xbox console, thereby removing key sales drivers for Sony's PlayStation console. In turn, Sony argues that the acquisition deal "would cause significant harm to consumers, competition, and developers."
NASDAQ: MSFT
Key Data Points
Regulators are also reviewing how Microsoft integrates its business communication platform, Teams, into its ubiquitous Office productivity software, according to Reuters. Cloud software giant Salesforce (CRM 1.55%), which owns the workplace messaging tool Slack, wants the European Commission to force Microsoft to market its Teams and Office products separately rather than bundling them together.
European regulators are reportedly gathering information that would allow them to launch an official investigation.
Now what
Microsoft may offer concessions to alleviate regulators' concerns. The company has already offered to make Call of Duty available on Sony's PlayStation for 10 years. Whether these remedies will be enough for its Activision deal to proceed, however, remains to be seen.
