The Microsoft Activision Blizzard acquisition brings together one of the game industry’s three leaders with one of the largest developers. If Xbox continues to pursue the strategy, does the purchase violate antitrust laws? Legal experts say no.
The US antitrust laws are similar to the competition law we know in Europe. This stipulates that companies may not enter into cartel agreements and that companies may not abuse dominant positions. In America, it is primarily intended to ensure that companies do not acquire too large a market share.
do you remember how Xbox successful Bethesda acquisition without violating antitrust laws? This is because it was a form of vertical integration where a content distributor like Xbox buys a content producer like Bethesda.
David Hoppe, Managing Partner at San Francisco-based Media and Tech law firm Gamma Law says Xbox’s acquisition of Activision is based on the same principle.
“The acquisition is another example of the so-called ‘vertical integration’ principle in the video game industry — a console manufacturer (distributor) taking over a game developer (producer). Sure, it’s the biggest deal in history, but historically, judges in the United States don’t like to apply antitrust principles to vertical transactions,” Hoppe said.
Hoppe explains that it’s “pretty ridiculous right now to make an antitrust case based on the acquisition resulting in less consumer choice in the shooter games product category, for example.”
In fact, the absence of Xbox in mobile games for one of the reasons for Activision’s offering when it discussed the strategic benefits of Xbox’s acquisition of Activision, which includes mobile developer King.
The acquisition of Activision Blizzard by Xbox is to be completed by June 2023. Read here how the game industry reacts to Xbox that Activision buys Blizzard.