Xbox Activision Blizzard Acquisition Shouldn't Break Antitrust Laws, Legal Expert Says

ign.com:

The Microsoft Activision Blizzard acquisition will bring together one of the game industry’s big-three companies, with one of the industry’s leading game developers. As Xbox continues its strategy of major acquisitions, will the Activision Blizzard purchase run afoul of antitrust laws? A legal expert says not likely at this stage.

Remember how Xbox successfully acquired Bethesda without running into complications with antitrust laws? This is because it was a form of vertical integration where a distributor of content, like Xbox, purchased a content producer, like Bethesda.

David Hoppe, a Managing Partner at the San Francisco-based Media and Tech law firm Gamma Law says Xbox’s acquisition of Activision runs on the same principle.

“The acquisition is another example of so-called ‘vertical integration’ in the video game industry — a console manufacturer (distributor) acquiring a game developer (producer). Of course, this is the largest such deal in games industry history, but U.S. courts have historically been unwilling to apply restrictive antitrust principles to vertical transactions,” Hoppe says.

Have you played Call of Duty: Vanguard?

Indeed historically the Justice Department has not had issues with console exclusivities, which is a likely outcome of the Xbox-Activision deal.

While there is a chance the deal could be viewed as a “horizontal” acquisition — where two direct competitors are merged — given that Xbox is also a game developer. Hoppe says, "it is difficult to apply legal competition principles when the ‘products’ are creative works like video games, each one of which is arguably unique and therefore not in direct competition."

While convergence in the industry means all entertainment options compete with each