Washington, D.C. — In response to the Federal Trade Commission’s recent 3-1 vote to file a lawsuit blocking Microsoft’s $68.7 billion acquisition of Activision Blizzard (Activision), one of the world’s largest video game publishers, the American Economic Liberties Project released the following statement.

“Microsoft’s attempt to acquire Activision is unlawful, and it’s not particularly close. The FTC made the right call,” said Sarah Miller, Executive Director of the American Economic Liberties Project. “Microsoft’s flurry of last-minute promises to not abuse the market power that they’d gain from this deal reinforce its underlying illegality.”

“The antitrust agencies’ long history of overseeing failed settlements, even when appropriately negotiated with the agency rather than as part of a PR push, suggest an outright block will best safeguard competition,” Miller added.

A Microsoft-Activision merger would combine two of the largest game developers in the world. Activision — thanks to a merger with Blizzard in 2008 — publishes some of the world’s most popular AAA game titles. Already, Microsoft is the third largest game developer globally, already owns around 30 gaming studios, and owns the Xbox gaming platform.

With Xbox and Activision-Blizzard’s massive catalog of games, this merger would allow Microsoft to capture and dominate a large portion of the industry, consolidating the video game industry into a small group of firms who control walled gardens of content, data, and advertising. Microsoft could use this power to withhold the must-have games and products of Activision Blizzard from other consoles, restricting them to be Xbox exclusives. The merger would likely raise prices down the line for gamers and give Microsoft crucial power over consumer data — knowing well that consumers’ alternatives are scarce and expensive.

Microsoft has argued that the merger is essential to its efforts to break into the mobile app gaming sector, where Apple and Google have ironclad control because of their chokehold on App Stores. As President Brad Smith wrote, acquiring “Activision Blizzard would enable Microsoft to compete against these companies.” Yet, while Microsoft’s claim that Apple and Google have monopoly control over the mobile ecosystem is reasonable, the appropriate response is not to grant Microsoft corresponding market power so it can cut special deals. Antitrust enforcers must instead break Google and Apple’s control over the mobile ecosystem, as Congress and a number of state legislators are currently considering.

Learn more about Economic Liberties here.