The Federal Trade Commission is launching an inquiry into massive investments made by Microsoft, Amazon and Alphabet into generative AI startups OpenAI and Anthropic, the agency announced on Thursday. The FTC said that it had issued “compulsory orders” to the companies and would scrutinize their relationships with AI startups to understand their impact on competition.

“History shows that new technologies can create new markets and healthy competition,” FTC Chair Lina Khan said in a statement. “As companies race to develop and monetize AI, we must guard against tactics that foreclose this opportunity. Our study will shed light on whether investments and partnerships pursued by dominant companies risk distorting innovation and undermining fair competition.” The companies have 45 days to respond to the agency. 

Ever since OpenAI released ChatGPT at the end of 2022, generative AI has exploded, sparking both excitement about its potential to increase productivity as well as anxiety about job losses. Against this backdrop, the world’s largest tech companies have been racing to develop their own versions of the tech as well as pouring billions of dollars into smaller startups creating it. Microsoft, for instance, invested more than $13 billion into OpenAI for a 49 percent stake, using the startup’s tech to add generative AI capabilities to Bing, its own search engine, as well as Windows and Office. Amazon and Alphabet invested $4 billion and $2 billion in Anthropic, an AI startup that makes a chatbot called Claude.

In an opinion column in The New York Times last year, the FTC’s Khan wrote that “the expanding adoption of AI risks further locking in the market dominance of large incumbent technology firms” and argued for AI regulation.

As part of its investigation, the FTC is seeking information about the specifics of Microsoft, Amazon and Alphabet’s investments, decisions around new product releases, oversight rights, analyses of market share and potential for sales growth among other details.

The US isn’t the only country examining Big Tech’s ties with generative AI startups. The UK’s Competition and Markets Authority said last month that it was examining whether Microsoft’s investment into OpenAI was subject to antitrust law.

In a post on X in December, Microsoft’s president Brad Smith characterized the company’s OpenAI investment as a partnership “that has fostered more AI innovation and competition, while preserving independence for both companies.” Microsoft currently has a non-voting observer seat on OpenAI’s board, which, said Smith, was “very different from an acquisition.”

Microsoft, Amazon, Alphabet, Anthropic, and OpenAI did not immediately respond to a request for comment from Engadget.

We knew it was coming, but now we have a date: Bobby Kotick will officially step down as CEO of Activision Blizzard on December 29, 2023. Blizzard and King vice chairman Humam Sakhnini will also leave at the end of December, Activision Blizzard chief communications officer Lulu Meservey is out in January, and a handful of other executives will leave in March, according to an internal memo from Xbox head Phil Spencer published by The Verge.

Activision Blizzard vice chairman Thomas Tippl, Blizzard president Mike Ybarra and King president Tjodolf Sommestad will remain at the studio and report to Matt Booty, Microsoft's president of gaming content and studios. Otherwise, leadership teams across Activision, Blizzard and King will stay the same, according to the memo.

Kotick has been the head of Activision since 1991. At Activision Blizzard, he oversaw massively popular franchises including Call of Duty, Diablo, Starcraft and World of Warcraft, and once the company acquired mobile studio King in 2016, he added Candy Crush to that list. The company is a AAA powerhouse and it generated $7.5 billion in revenue in 2022.

Activision Blizzard was sued by California's Civil Rights Department in 2021 over allegations of systemic sexism, discrimination and harassment at the studio, and executives were accused of fostering a frat-house style culture. At the time, all top leadership roles at Activision Blizzard were filled by white men. The Securities and Exchange Commission filed a separate, related lawsuit against the studio a few months later. In November 2021, The Wall Street Journal reported Kotick had long ignored and helped cover up instances of sexual harassment at the studio. In response, workers at Activision Blizzard held walk-outs and demanded Kotick's resignation, but a shareholder vote in 2022 kept him in place.

Activision Blizzard settled the SEC lawsuit for $35 million in February, and it settled the California CRD suit for $54 million just days ago.

Microsoft announced its intent to purchase Activision Blizzard in early 2022, lawsuits and all. The deal was valued at $69 billion, and considering the scale of both companies involved, it faced intense scrutiny from regulators in the US and the UK. The acquisition was approved in October, after 21 months of legal arguments and concessions. Microsoft is now the third-largest video game studio in the world by revenue and it's the face of the ongoing consolidation craze tearing through the industry.

Once Microsoft's purchase went through, Kotick said he'd stay on through the end of 2023. According to Bloomberg, Kotick is set to make $375 million from the acquisition, and he's expecting a golden parachute of $14.6 million.

Adobe is abandoning its planned $20 billion acquisition of Figma after the companies determined that there was no clear path to obtaining approval from UK and European Union regulators. The two sides have signed an agreement that fully resolves all aspects of the failed deal. Adobe will pay collaborative design platform Figma a previously agreed $1 billion termination fee.

In November, the UK's Competition and Markets Authority (CMA) and the European Commission both cited concerns over the proposed acquisition's impact on competition. The CMA said in its provisional findings that that the merger would “eliminate competition between two main competitors.” The competition watchdog said it was considering either blocking the deal or requiring Adobe to sell Figma's core product, Figma Design, along with Adobe XD.

Earlier on Monday, Adobe claimed that it wouldn't offer the CMA any potential remedies. “It is clear that no realistic remedy would satisfy the concerns the CMA is maintaining,” an Adobe spokesperson told Bloomberg. “We believe that the best path forward is to continue our ongoing engagement with the CMA on the merits.”

Meanwhile, Adobe had anticipated a potential lawsuit from the US Department of Justice in an attempt to block the deal Stateside. The company and Figma reportedly met with DOJ officials last week to try and secure approval for their merger. 

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The UK is considering an investigation into Microsoft's partnership with OpenAI to decide if it has resulted in an "acquisition of control" that's subject to antitrust law, the Competition and Markets Authority (CMA) wrote today. The regulator said it's considering "recent developments," no doubt referring to the Sam Altman CEO ouster drama in which Microsoft played a large role. 

"The CMA is now issuing an ITC to determine whether the Microsoft/OpenAI partnership, including recent developments, has resulted in a relevant merger situation and, if so, the potential impact on competition," it said in a news release. "The CMA will review whether the partnership has resulted in an acquisition of control — that is, where it results in one party having material influence, de facto control or more than 50% of the voting rights over another entity."

The regulator noted that the "close and multifaceted" partnership includes a multi-billion dollar investment by Microsoft, technology development cooperation and cloud services. It added that both firms have significant activities in financial and related markets, meaning their business dealings directly affect investors. It added that Microsoft was recently involved in developments related to OpenAI's governance.

When Sam Altman was fired by OpenAI's board, Microsoft stepped in to hire him, and a majority of OpenAI's staff threatened to bolt to Microsoft as well. OpenAI's board relented soon after and Altman returned as CEO. "Microsoft executives have since concluded that the current situation [with Altman back in charge] is the best possible outcome," according to a New Yorker expose on the drama. 

The CMA is now seeking views on whether the partnership creates a relevant merger situation and how it impacts competition in the UK. If an investigation is launched, it would be the second one involving Microsoft in the last year, following the company's Activision Blizzard acquisition. The UK's probe had material effects on that merger, as Microsoft agreed to sell Activision Blizzard game streaming rights to Ubisoft to satisfy the CMA. 

Back in June, the UK’s Competition and Markets Authority (CMA) began an in depth investigation into the planned $20 billion Adobe and Figma merger. The organization has released its findings and, well, they don’t paint a rosy picture. The probe tasked independent experts to determine whether or not the merger would reduce competition in the design space and the results suggest that, in fact, it’ll do just that.

It must be noted, however, that these are provisional findings. With that said, the CMA’s message is clear. The group states that the merger will “eliminate competition between two main competitors”, which is fairly obvious given Figma and Adobe’s standing in the industry. The findings also state that the deal would “reduce innovation” and the development of competing products. Finally, it’ll also “remove Figma as a threat” with regard to Adobe’s flagship software suites like Photoshop and Illustrator.

Figma is a giant player in the UK design space, accounting for 80 percent of the market. It’s also a major part of the country’s $19.4 billion app development sector. Without the merger, the CMA suggests, Figma would continue to develop or expand products that challenge Adobe. That goes away once the merger is in place because, you know, why challenge yourself?

The investigation concludes that the merger would eliminate competition between these two major players across multiple fields, including product design, image editing and illustration. These sectors account for $60 billion in annual revenue across the UK, adding up to nearly three percent of the national economy, with 850,000 skilled workers across the impacted industries. Another intent of the investigation was to suss out if the merger would damage the UK’s economy and it concluded it most likely will.

Again, these are provisional findings and the CMA has yet to consult the data to reach a final decision as to whether or not it’ll allow the sale to go through. It plans on taking some time to “listen to any further views,” likely referring to Adobe. To that end, Adobe argues that buying Figma would strengthen both companies, saying that the Creative Cloud apps would get some of Figma’s collaborative features and vice-versa. The company says it’s “deeply committed” to keeping Figma an independent entity and that it has no plans to change the pricing, including Figma’s free tier.

If the deal’s approved by the UK, which looks more unlikely with this report, Adobe still has some other battles to fight before this merger officially goes through. The acquisition still faces a US investigation, and the EU has issued its own dire warning.

This would be the larger-ever-purchase for Adobe in its storied 41-year history. Figma, on the other hand, is a relative newcomer to the market, springing forth in 2012.

The biggest acquisition in gaming history and one of the largest in the tech industry is in the books. Twenty months after the deal was announced, Microsoft has bought Activision Blizzard for $68.7 billion, the largest acquisition in the company's history. CEO of Microsoft Gaming Phil Spencer has asked Activision CEO Bobby Kotick to stay on until the end of 2023, at which point he'll be leaving the company. It's been a long road filled with plenty of twists and turns to get to this point.

The UK's Competition and Markets Authority (CMA) initially blocked the deal in April, though it and the companies agreed to pause Microsoft's appeal to try and resolve the regulator's reservations over the merger's impact on the cloud gaming industry. An appeal tribunal approved a request to delay the proceedings. 

In an attempt to win over the UK regulator, Microsoft agreed to sell the cloud gaming rights for Activision Blizzard titles to Ubisoft. That means that not only should Activision Blizzard's games be on Xbox Game Pass, but they'll land on Ubisoft+ and any other game-streaming service Ubisoft decides to work with. Concerns about competition in the cloud gaming market was the CMA's reasoning for initially blocking Microsoft's takeover of Activision, but the watchdog said in September that the Ubisoft concession "opens the door to the deal being cleared." A few weeks later, the CMA has rubberstamped the merger.

Microsoft also signed 10-year agreements with Nintendo and several cloud-gaming companies to offer its titles on their platforms. Those moves led to the European Union giving the merger the green light. The bloc's competition officials reportedly didn't see anything in the amended merger agreement (with the Ubisoft plan factored in) that would prompt a fresh antitrust investigation. 

The Federal Trade Commission's attempts to stop the deal over competition concerns haven't panned out. The agency sued to block it in December and an evidentiary hearing in that case was slated to take place on August 2nd. The FTC tried to temporarily block the merger with a preliminary injunction ahead of its administrative trial, but a judge denied that effort. 

The FTC still plans to challenge the merger. If that effort is successful, Microsoft could be forced to divest some or all of Activision Blizzard.

But for now, the deal is done. It means, among other things, that Activision Blizzard titles will be available on cloud gaming platforms for the first time since the publisher pulled its titles from GeForce Now in early 2020. Its games will surely join Game Pass in the very near future, including on Xbox Cloud Gaming, and they'll pop up on Ubisoft+ and other platforms Ubisoft works with.

Those waiting for Activision Blizzard's two biggest games of 2023 to hit Game Pass will certainly need to remain patient, though. The publisher has said Call of Duty: Modern Warfare III and Diablo IV won't hit the service until next year.

Meanwhile, Blizzard games are already coming to Steam rather than being siloed on the Battle.net launcher. We'll probably see them appearing on Xbox's PC app too. For what it's worth, in court filings, Microsoft called Activision's strategy of releasing PC versions of Call of Duty titles exclusively on Battle.net in a bid to grow the platform a "resounding failure."

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One of the key reasons Microsoft gave for pursuing the deal was to accelerate its aim of becoming a major player in the mobile gaming market. With Activision Blizzard pulling in $1.9 billion in mobile revenue in the first six months of 2023 alone, it will achieve that goal practically overnight. 

King, which is behind the hugely successful Candy Crush franchise, generated more revenue ($1.49 billion) than Activision ($1.15 billion) in the first half of this year. Thanks largely to the massive success of Diablo IV, Blizzard brought in the most of the three units during that period with a hair over $1.5 billion. Still, King had 238 million monthly active users as of June 30th, just over twice as many as Activision and Blizzard combined. It recently emerged that Candy Crush Saga has generated over $20 billion in lifetime revenue.

Blizzard has also been making a push into mobile gaming with the likes of Diablo Immortal. Activision, meanwhile, has Call of Duty Mobile in its portfolio and Call of Duty: Warzone Mobile is on the way. The company said in its most recent earnings report Call of Duty has around 90 million monthly players, "with over half of all engagement on the mobile platform."

As for exclusivity of future projects, Microsoft Gaming CEO Phil Spencer has promised to "do whatever it takes" to keep shipping Call of Duty games on PlayStation. After months of refusing to do so, Sony eventually signed a 10-year pact just before the initial merger deadline of July 18th to keep that particular franchise on PlayStation, conceding defeat in its efforts to halt the acquisition. However, Microsoft will likely opt to keep other Activision Blizzard games off of PlayStation platforms, as it has done with ZeniMax/Bethesda titles Redfall and Starfield, as well as MachineGames' upcoming Indiana Jones project.

Meanwhile, many observers hope that Microsoft will help stamp out the alleged toxic workplace culture at Activision Blizzard. Earlier this year, Activision Blizzard paid $35 million to settle SEC charges related to how it handled employees' workplace misconduct complaints.

In 2021, the California Civil Rights Department (formerly the Department of Fair Employment and Housing) sued the company and accused it of fostering a "frat boy" culture in which female employees were harassed and discriminated against. Activision Blizzard countersued the CRD in December. The case hasn't been resolved. In fact, the CRD's lawsuit (which, along with other events, sent Activision's stock tumbling) set the ball rolling on Microsoft's acquisition of the company in the first place.

UK's antitrust regulator has given Microsoft the green light to buy Activision Blizzard for $68.7 billion following a protracted back and forth. The regulator called Microsoft's concession to sell cloud gaming rights to Ubisoft a "gamechanger that will promote competition."

With the last major obstacle out of the way, the Competitions and Markets Authority (CMA) has now largely cleared the path for the companies to close the biggest merger in gaming history. That move was widely expected after the watchdog said in September that the company's revised merger agreement "substantially addresses previous concerns and opens the door to the deal being cleared."

In April, the CMA blocked the deal on the grounds of a belief that it would make Microsoft too dominant of a player in the cloud gaming space. However, as other dominoes that were preventing the deal from happening fell, the CMA gave Microsoft a second chance to resolve its concerns. The companies extended their merger agreement by three months to give them time to smooth things out with the CMA.

Microsoft later submitted a modified deal to the watchdog that will see it sell Activision Blizzard game streaming rights to Ubisoft if the merger goes through. Ubisoft would then handle cloud streaming rights in perpetuity for current titles and any others that Activision Blizzard releases over the following 15 years. Given that the CMA's misgivings over the original deal, Microsoft evidently hoped that the concession would be significant enough to resolve the regulator's concerns. Evidently, that's exactly what happened.

The CMA said last month that it had "residual concerns" about enforcement of Microsoft's revised proposal. However, it noted that "Microsoft gave undertakings that will ensure that the terms of the sale of Activision's rights to Ubisoft are enforceable by the CMA."

The regulator touted its role in forcing Microsoft to make concessions. "With the sale of Activision’s cloud streaming rights to Ubisoft, we’ve made sure Microsoft can’t have a stranglehold over this important and rapidly developing market," CMA chief executive Sarah Cardell said in a statement. "As cloud gaming grows, this intervention will ensure people get more competitive prices, better services and more choice. We are the only competition agency globally to have delivered this outcome."

There were suggestions that European Union antitrust regulators might review the amended deal. EU officials approved the acquisition in May after Microsoft made some cloud gaming concessions. According to Bloomberg, the bloc's competition regulators didn't see cause for concern with the amended deal that would prompt another investigation.

After a US court rejected the Federal Trade Commission's attempt to temporarily block the deal pending an administrative trial, the CMA and both companies in question asked a tribunal to delay Microsoft's appeal against the UK regulator's initial decision. The tribunal agreed and, after reviewing the updated proposal from Microsoft, the CMA has rubberstamped the merger. It now seems like just a matter of time until this is a done deal and one of the biggest tech mergers in memory is in the books.

There is one significant potential hurdle remaining, however. The FTC is moving forward with its attempt to challenge the deal. That effort won't stop Microsoft from closing the acquisition, but there's a chance that the FTC could force the company to divest some or all of Activision Blizzard.

Game Pass subscribers will have to wait a bit more before they're able to play Diablo IV and Call of Duty: Modern Warfare III on the service. Activision Blizzard has announced on X, formerly Twitter, that it doesn't have plans to add those games — among other upcoming and recent releases — to the service anytime this year. Based on its explanation, it's waiting for Microsoft's acquisition of the company to be finalized, which is expected to happen within this month. 

"As we continue to work toward regulatory approval of the Microsoft deal, we've been getting some questions whether our upcoming and recently launched games will be available via Game Pass," the gaming giant wrote. It added that it expects to start working with Xbox and add its titles to the Game Pass service once the deal closes, and that the process would begin "sometime in the course of next year."

Microsoft first announced that it was buying Activision Blizzard for $68.7 billion in early 2022 and that it was hoping to close the deal by June 2023. However, several regulators moved to block the purchase over concerns that it would harm competition and stifle innovation. The European Commission rubberstamped the acquisition in May with the condition that Microsoft offers its games on other cloud gaming services. Meanwhile, the UK's Competition and Markets Authority blocked the deal until the companies promised to sell "cloud streaming rights for all current and new Activision Blizzard PC and console games released over the next 15 years to Ubisoft Entertainment... in perpetuity." In the US, courts denied the Federal Trade Commission's (FTC) request to issue an injunction on the purchase. However, the FTC announced in September that it plans to restart its in-house trial against the acquisition. 

The film-focused social media site LetterBoxd has new ownership. Cofounder Matthew Buchanan announced on Friday that Tiny, a venture capital firm, has bought a 60 percent stake in the platform. The New York Times reported that the deal values Letterboxd at over $50 million. Buchanan and fellow founder Karl von Randow will retain minority shareholder positions and continue to lead the company as they insist “very little else will change.”

Founded in 2011, Letterboxd was a rare independently owned social network. It grew significantly during pandemic lockdowns as homebound users sought new movies to stream (and communities to chat with). Lacking the clutter of Amazon-owned IMDb, the website and app provided a haven for film buffs who wanted to write and read reviews, rate movies, create watch lists and socialize with fellow enthusiasts.

Letterboxd’s cofounders frame the move as less about selling out to big money and more a growth opportunity. “Teaming up with Tiny represents a big leap forward for us,” Buchanan and von Randow wrote in a statement. “We see this as a huge win for our community, enabling us to cement Letterboxd’s future with additional resources without sacrificing the DNA of what makes it special.”

The site doesn’t currently support television series, but the founders say they’re working on a way to offer that. They insist they want to incorporate TV shows “only once we know we can do it right.” Letterboxd partnered with Netflix earlier this year, bringing the streaming service’s recommendations to the social platform. 

“We’ve been huge fans and users of Letterboxd for a long time and could not be more excited to join forces with Matthew, Karl, and the rest of the team for the long-term,” said Andrew Wilkinson, Co-founder of Tiny. “If you’re running out of things to watch, it’s because you haven’t used Letterboxd yet — and we believe that the potential for superior discovery is a large opportunity.”

Just when Microsoft's buyout of Activision seemed to finally be near complete, the Federal Trade Commission said it will revive its attempt to block the $69 billion deal in an adjudicative process. The FTC plans to restart its in-house trial against Microsoft’s multibillion-dollar acquisition of the Call of Duty maker.

This effort by the FTC is unlikely to be anything more than a nuisance for Microsoft. It already received EU approval over the summer when the European Commission endorsed the deal as long as the tech giant could ensure “full compliance with commitments.” And more recently, the UK's Competition and Markets Authority issued a preliminary approval of the merger. Activision Blizzard CEO Bobby Kotick called it “a significant milestone for the merger” in a statement and said he remains optimistic that the deal will complete soon. The CMA's consultation on Microsoft's proposed changes is expected to be complete by October 6, just days ahead of the October 18 deadline for the CMA’s review process.

Normally, the FTC typically drops its challenges to deals when efforts are lost in federal court and despite the agency’s effort, this move will not delay the deal from going through. The likely worst-case scenario for Microsoft would be divestiture. Being forced to sell Activision or parts of it after the fact would not be ideal, but at least short term there seems to be little chance of the FTC derailing things.

The agency’s failed attempt to block the acquisition over the summer in the US should have put an end to the bargaining when the FTC’s injunction request to block the deal got rejected and the Ninth Circuit Court of Appeals denied the agency’s last-ditch effort. Judge Jacqueline Scott Corley said in her ruling that the FTC did not prove the deal would harm consumers.

Microsoft told Bloomberg that it's not overly concerned about the move preventing its purchase. Regardless of what impact it could have, the FTC’s in-house hearing will only start after the Ninth Circuit issues an opinion on the appeal, according to the filing.

Lulu Cheng Meservey, the CCO of Activision, said the company is focused on closing the deal with Microsoft. In a jab on X, the site formerly known as Twitter, she questioned the FTC for how it “uses limited taxpayer resources.”