As Waypoint wrote last month, one of the scariest things about Microsoft’s plan to acquire Activision-Blizzard for $68.7 billion is how much additional power it will give one of the already most powerful players in the video game industry.
Microsoft knows that regulators around the world who are going to have to approve the acquisition and regulate their platforms in other markets will have similar fears, which is why yesterday it published a blog post with a comforting message: Microsoft promises benevolent self-regulation and permission for some parts of its huge library of games to exist on platforms it does not own .
“Some commentators have asked whether we will continue to make popular content like Activision’s Call of Duty available on competing platforms like Sony’s PlayStation,” Microsoft President and Vice Chair Brad Smith wrote on the company’s site. “The obvious concern is that Microsoft could make this title available exclusively on the Xbox console, undermining opportunities for Sony PlayStation users.”
“To be clear, Microsoft will continue to make Call of Duty and other popular Activision Blizzard titles available on PlayStation through the term of any existing agreement with Activision,” Smith said, and added that Microsoft is also “interested in taking similar steps to support Nintendo’s successful platform,” where Activision currently publishes games in the Spyro, Crash Bandicoot, and Tony Hawk series.
Microsoft honoring existing agreements with other companies and its stated intentions to keep making such agreements in the future still gives it the ability to change course whenever it wants. Under this arrangement, if Microsoft wants to make Call of Duty an Xbox exclusive in the future, it can, which is why regulators should be worried, and why Microsoft is publishing this preemptive blog post to begin with. Or it can offer the game free through Game Pass and charge full-price elsewhere, undercutting those competing platforms.
Microsoft spends a great deal of time in this post insisting that it believes in regulation, but clearly positions it as inherently antagonistic to "fundamental values like privacy and national and cyber security." But while the company believes that this new legislation is inevitable, it wants to make sure it's "possible" to ensure companies "innovate responsibly and grow a healthy and profitable business." How? By letting them get a shot at regulating themselves, of course.
Microsoft lists a series of "Open App Store Principles" it promises will be adhered to in four key areas. The first (Quality, Safety, Security & Privacy) promise to ensure access for developers, protect consumers and gamers, as well as respect privacy. The second centers on “Accountability” and promises to hold apps to higher standards as well as not use non-public information from the app store to compete. The third category—"Fairness and Transparency”—promises not to self-preference as well as to be transparent and consistent about promotion and marketing rules. The fourth are about "Developer Choice" and promise to not require developers to use Microsoft's payment system, offer exclusive deals, disadvantage developers who do the previous items with other app stores, and prevent communication with customers.
Critically, these are all just promises, explicitly offered because they wish to adapt ahead of regulation and reduce the amount of scrutiny that can be applied by anyone except itself.
For years, the Federal Trade Commission was essentially asleep at the wheel, allowing companies like Facebook to gobble up competitors and become the tech giants users loathe today. More alert regulators in Europe, new leadership at the FTC, and growing criticism of tech giants around the could pose a more serious challenge to this acquisition (See Nvidia’s failed attempt to acquire chip maker ARM due to “significant regulatory challenges.”)
We should recognize Microsoft’s messaging for what it is: an attempt to convince us that self-regulation will turn out good for all of us. Self-regulation is how we got here, though. We need laws, not agreements—antitrust actions backed up by law, not corporate rhetoric that will disappear at Microsoft's earliest convenience.