Sony accused of lying to EU regulators about the Microsoft Activision deal

What you need to know

  • Microsoft’s Frank X. Shaw has claimed that Sony recently lied to European Union (EU) regulators about its in-progress acquisition of Activision Blizzard.
  • Specifically, Shaw says that Sony told the EU Microsoft was not willing to offer the PlayStation maker parity with Call of Duty, despite Microsoft previously proposing a 10-year deal.
  • Microsoft continues to assert that it wants to bring games to more people, not less, and that making Call of Duty exclusive to Xbox would “defy business logic.”

As Microsoft’s planned $69 billion acquisition of Activision Blizzard continues to attract thorough scrutiny from regulators, the company has claimed that Sony — the producer of PlayStation and one of the deal’s largest opponents — recently lied to the European Union (EU) about its plans for Call of Duty. While Microsoft has publicly committed to keeping the popular first-person shooter franchise on PlayStation once the merger closes, the firm says that Sony has been suggesting otherwise to Brussels officials. This news comes as the EU reportedly plans to serve Microsoft an antitrust warning about the deal.

“I hear Sony is briefing people in Brussels claiming Microsoft is unwilling to offer them parity for Call of Duty if we acquire Activision. Nothing could be further from the truth,” wrote Frank X. Shaw, Microsoft’s Corporate Vice President of Communications. “We’ve been clear we’ve offered Sony a 10 year deal to give them parity on timing, content, features, quality, playability, and any other aspect of the game. We’ve also said we’re happy to make this enforceable through a contract, regulatory agreements, or other means.”

Call of Duty, a series frequently home to countless players and hundreds of millions of dollars in sales, is undoubtedly one of the largest entertainment franchises in the world. Initially, Microsoft offered Sony terms to keep Call of Duty on PlayStation for three years following the completion of its Activision Blizzard acquisition, which CEO Jim Ryan called “inadequate” in a statement. Following this, Microsoft offered Sony a 10-year deal, with the two companies reportedly meeting to discuss specific details. The full outcome of these talks remains unknown, but based on Shaw’s public statements, it appears that an agreement was not reached.

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Microsoft has repeatedly asserted that making Call of Duty exclusive to its Xbox consoles wouldn’t be in line with its plans, with Microsoft Gaming CEO Phil Spencer stating that Microsoft is primarily acquiring Activision Blizzard for its dominant mobile gaming position and that the firm “wants to be where players are, especially with franchises the size of Minecraft and Call of Duty.” In an op-ed, Microsoft President Brad Smith also wrote that making Call of Duty exclusive would be “economically irrational,” as “a vital part of Activision Blizzard’s ‘Call of Duty’ revenue comes from PlayStation game sales.” Shaw reiterates these arguments in his own comments.

“Sony is the console market leader and it would defy business logic for us to exclude PlayStation gamers from the Call of Duty ecosystem,” Shaw said. “Our goal is to bring Call of Duty and other games – as we did with Minecraft – to more people around the world so they can play them where and how they want.”

Regulators are expected to make final decisions about the merger in the spring, with the UK’s Competition and Markets Authority (CMA) planning to share a preliminary decision in late January or February. The EU and the CMA are set to deliver their verdicts on April 11 and April 26, respectively.

Notably, the US Federal Trade Commission (FTC) has already filed a lawsuit to block the deal, citing upcoming Xbox and Windows PC exclusive games from the recently-acquired ZeniMax such as Starfield and Redfall as examples of why the company can’t be trusted (Microsoft never committed to making these games multiplatform). Earlier this week, a report suggested that the FTC timed its lawsuit to manipulate the EU and discourage the regulator from reaching a settlement with Microsoft regarding its concerns about the deal.

Windows Central’s take

Between the FTC reportedly timing its lawsuit against the merger to manipulate the EU into avoiding settlements with Microsoft and Sony outright lying about Microsoft’s planned commitments, it’s hard not to laugh at how ridiculous things have gotten. Assuming Shaw’s assertions are true, Sony’s approach to opposing the merger has reached a new level of bad faith. It reminds me of when the company complained Microsoft might raise its Xbox prices after buying Activision Blizzard, mere months after it raised the cost of its own PS5 systems.

Admittedly, it’s possible that Microsoft isn’t being honest here itself. However, unlike Sony, it’s proven that it’s actually willing to come to the table, with the company publicly stating several times that it is happy to work with regulators and negotiate with competitors. Notably, Microsoft even entered 10-year commitments to put Call of Duty on Steam and Nintendo Switch, showing its willingness to bring Activision’s premier shooter to platforms other than its own. For those reasons, and because of Sony’s conduct thus far, I’m strongly inclined to believe Shaw’s claim.

At the end of the day, it’s become increasingly clear that Sony is willing to say or do whatever it has to do to obstruct Microsoft’s acquisition, and that now includes blatantly lying to regulators. So, I ask this: who’s really trying to stifle competition?

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