The battle between the Federal Trade Commission (FTC) and Microsoft that forced the Activision Blizzard merger to stretch on for months is far from over. In a new filing at the US Court of Appeals for the Ninth Circuit, the FTC called Microsoft out again over the price hike of Game Pass Ultimate prices, saying it is the consumer harm they warned about prior to the merger.
“The Federal Trade Commission writes to alert the Court to Microsoft’s announced price increases in the multi-game-subscription and cloud-gaming markets, which the district court found relevant to the merger analysis,” the regulator wrote in the new court filing.
According to the regulator, the new Game Pass Standard that Microsoft plans to introduce is a “degradation” of the Console Game Pass which will be phased out. In addition to being degraded and withholding day-one game releases, the FTC noted that it would cost players 36% more compared to Console Game Pass.
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“Microsoft’s price increases and product degradation—combined with Microsoft’s reduced investments in output and product quality via employee layoffs —are the hallmarks of a firm exercising market power post-merger.”
The FTC insinuated that Microsoft was indirectly forcing players to upgrade to its most expensive Game Pass Ultimate by adding Call of Duty (CoD) only to the most expensive tier and discontinuing the Console tier, “shortly before releasing CoD’s newest game”. Players who don’t want to upgrade may wait up to 12 months before they can play the newest CoD installment.
The FTC argued that the new decision by Microsoft contradicts their position before the merger that “the acquisition would benefit consumers by making [CoD] available on Microsoft’s Game Pass on the day it is released on console (with no price increase for the service based on the acquisition)”.
“Microsoft’s post-merger actions thus vindicate the congressional design of preliminarily halting mergers to fully evaluate their likely competitive effects, and judicial skepticism of promises inconsistent with a firm’s economic incentives,” the regulator concluded.
Starting July 10, the price of the Game Pass Ultimate tier will jump from $16.99 / £12.99 / €14.99 to $19.99 / £14.99 / €17.99 per month. PC Game Pass will also experience a bump from $11.99 / £9.99 / €11.99. The price increase will vary from country to country. See the full price changes here.
