Can Big Tech get bigger? Microsoft is urging governments to say yes.

In recent weeks, Microsoft has accused Sony, its main video game rival, of misleading regulators. His lawyers have shown British officials game consoles, including an Xbox. And the president of a major union that Microsoft has been courting has spoken up to the Federal Trade Commission on behalf of the company.

The measures are part of a campaign by Microsoft to counter intensified scrutiny of video game publisher Activision Blizzard’s $69 billion acquisition, the largest consumer tech deal since AOL bought Time Warner two decades ago and far larger than Elon Musk’s recent 44 -Billion dollar acquisition of Twitter.

Microsoft’s goal is simple: convince skeptical governments around the world to agree to the Blockbuster acquisition. Sixteen governments have to approve the purchase, putting Microsoft under the most regulatory pressure it has faced since the antitrust battles of the 1990s. And in three key places — the United States, the European Union and the UK — regulators have begun in-depth reviews, with the European Commission saying this month it is launching an in-depth investigation into the deal.

Whether Microsoft manages to get regulatory approval to buy Activision, which makes games like Candy Crush and Call of Duty, will send a message about Big Tech’s ability to do so amid growing fears that industry giants wield too much power expand. If Microsoft, whose public affairs department has spent the last decade building the nice guy’s reputation, can’t pull off a mega deal, can anyone?

“If this deal had happened four years ago, it would hardly be of interest,” Brad Smith, Microsoft president, said in an interview. “If you can’t do something easy, then we all know you can’t do something difficult.”

Google, Meta, Amazon and Apple are all facing increasing accusations that they are monopolies and regulators have tried to block some of their smaller businesses. In July, the FTC sued Meta, Facebook’s parent company, to prevent it from buying Within, a virtual reality startup. Last month, the UK forced Meta to sell Giphy, an image bank it bought for $315 million in 2020.

At the heart of regulators’ concerns about the Activision deal is whether it violates antitrust laws by giving Microsoft outsized power in the video game industry. They worry Microsoft could pull Activision’s games away from competitors like Sony or use them to gain an unfair advantage as more games are streamed online.

Mister. Smith said Microsoft is ready to formally agree to restrict its business practices to address antitrust concerns. But the United States and other countries are increasingly viewing such promises as insufficient unless a company spins off part of its business.

Microsoft’s deal with Activision will show whether tech giants can cope in the new environment, said William E. Kovacic, a former FTC chairman. “It’s a fundamental test,” he said.

The road ahead seems long. Of the 16 governments reviewing the deal, only Saudi Arabia and Brazil have approved it. Microsoft said it expects Serbia to approve the deal shortly.

Major regulators are skeptical about the tech giants. The FTC is headed by Lina Khan, a legal scholar and notable critic of Amazon. The European Commission has fined Google for violating antitrust laws and launched an investigation into Microsoft’s cloud service. In the UK, the Competition and Markets Authority has become increasingly hostile to corporate transactions.

In a statement, the Competition and Markets Authority said it would publish its findings on the deal in the “new year”. The European Commission said its investigation was “ongoing”. The FTC declined to comment on the deal.

When Microsoft completed its $26 billion purchase of professional networking service LinkedIn in 2016 — its largest acquisition at the time — the deal required just six government approvals.

The Activision deal is “significantly more resource intensive,” Mr. Smith said.

Getting approval for the acquisition is critical for Microsoft. Gaming has become its main consumer business, surpassing $15 billion in annual revenue, mostly under the Xbox brand. Compensation for Satya Nadella, Microsoft’s CEO, is tied in part to the growth of Game Pass, the company’s Netflix-like gaming subscription service. And Microsoft agreed to pay Activision up to $3 billion if the deal fell through.

Activision also needs sales to get through. It was troubled a year ago, with its share price falling, as it dealt with revelations of sexual misconduct and labor unrest.

Activision Chief Executive Bobby Kotick said in an interview that he has “a high level of confidence that regulators will be diligent in evaluating the industry.” He added, “I have no reason to believe that we will ultimately not be successful in the transaction.”

Microsoft’s deal with Activision was finalized on February 18th. In February, Mr. Schmied and Mr. Nadella met with officials and think-tank staffers in Washington to position the public on the purchase. During a meeting with reporters, Mr Nadella said the acquisition would benefit gamers by “providing more choices so they can play any game on any platform.” Courts regularly review whether a merger benefits consumers.

Several senators have asked the FTC to closely examine the impact of the takeover on workers. The Communications Workers of America, which had organized at Activision, also publicly questioned the deal. Woman. Khan, the chairman of the FTC, has a greater interest in examining how mergers could harm workers.

Mister. Smith sought advice from lawmakers and government leaders to address the labor issues.

In June, Microsoft forged an agreement with the CWA, pledging not to oppose unionization at Activision. The negotiations involved “more lawyers than a bar convention,” said Chris Shelton, the union’s president, in an interview. The concessions made the union supporters of the deal.

Last month Mr. Shelton met with Ms. Khan praised Microsoft’s commitment to remain neutral in union campaigns and said the deal should be approved.

“The FTC told me, ‘A lot of companies make a lot of promises and then they never deliver on their promises,'” he recalled. He said he told the agency the agreement was rock solid and in writing.

A spokesman for the FTC said agency officials did not offer an opinion on the deal or the collective agreement at the meeting.

Microsoft was less successful in quashing resistance from Sony, the maker of the PlayStation console. Sony has argued that Microsoft could pull Call of Duty from PlayStation to lure gamers to Xbox.

Microsoft has denied doing so. “The first call Satya and I made after the deal was announced was from Sony’s CEO to say, ‘Hey, we’re going to keep Call of Duty on your platform,'” said Phil Spencer, Microsoft’s head of gaming .

Sony was not mollified. In filings in Brazil, the company argued that Call of Duty is such a powerful gaming franchise that Microsoft could use it to harm competitors. It hired a consulting firm to organize meetings on Capitol Hill, two people familiar with the matter said. And his arguments were repeatedly cited in a September decision by the UK regulator to conduct a deeper investigation.

Microsoft accused Sony of misleading regulators, saying it “overstated the importance of Call of Duty to its viability.”

Mister. Spencer said that “sustaining and growing the existing Call of Duty business is central to the viability of the business.”

In a statement, Sony Interactive Entertainment chief executive Jim Ryan said it was “not true” that his company had failed regulators. He said Microsoft is “a tech giant with a long history of industry dominance” and “there’s a strong possibility that the choices gamers have today will disappear if this deal goes through.”

Microsoft said on 11/11 it offered Sony a 10-year deal to keep Call of Duty on PlayStation. Sony declined to comment on the offer.

Last month Mr. Spencer and other Microsoft executives brought an Xbox, PlayStation, Nintendo Switch and other devices to a meeting with regulators in London, where they demoed Call of Duty and other games to illustrate a dynamic market, people familiar with the visit said .

Regulators are also concerned about what the deal could mean for the future if cloud computing allows people to stream demanding games to various devices, including mobile phones.

In September, the UK regulator expressed concern that combining Activision’s games library with Microsoft’s cloud computing capabilities would give Microsoft “an unprecedented advantage” over game-streaming competitors. Microsoft argued that it had “no advantage” because its streaming wasn’t supported by its Azure cloud technology.

In its annual report this year, Microsoft said its streaming product “uses” Azure. The company said that while its gaming servers shared data centers with Azure, the hardware was different.

In the United States, more than 10 FTC officials are reviewing the deal, a person with knowledge of the agency said. They interviewed executives, including Mr. Nadella and Mr. Smith, in the late summer and fall.

And in a sign the FTC could legally challenge the deal, two people said it recently asked other companies to file affidavits to set out their concerns.

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