Microsoft (MSFT:NASDAQ) and Facebook-owner Meta Platforms (META:NASDAQ) are facing growth roadblocks as regulators in the US, UK and EU bare their teeth.

The US Federal Trade Commission has moved to block Microsoft from its planned $69 billion deal to buy gaming giant Activision Blizzard (ATVI:NASDAQ), claiming that it could undermine competition in high-performance consoles and gaming subscription services.

In a recent complaint, the FTC argued that Microsoft and Sony already ‘control’ the high-performance gaming industry, via Xbox and PlayStation consoles, and acquiring Activision Blizzard would increase Microsoft’s power in the sector.

Holly Vedova, the FTC’s Bureau of Competition director, noted Microsoft’s record of acquiring ZeniMax and limiting the publishing of popular games, such as Starfield and Redfall, to Xbox consoles. The watchdog is speculating a similar fate for Activision’s Call of Duty, World of Warcraft, Diablo and Overwatch, and other games in the Activision ecosystem.

Activision has blasted back, saying the watchdog’s decision is based on ‘misconceptions about the tech industry’ and believes the deal will still happen.

‘The allegation that this deal is anti-competitive doesn’t align with the facts, and we believe we’ll win this challenge,’ said Activision chief executive Bobby Kotick. Sony objected to the buyout claiming that PlayStation would no longer be able to compete in the 18+ shooter space should Call of Duty become an Xbox exclusive.

Making Call of Duty exclusive to Xbox doesn’t make good business sense, claims Kotick. ‘Microsoft would lose billions of dollars in lost sales and would infuriate both PlayStation owners and Xbox owners, who would lose the ability to play with their friends on PlayStations. The player backlash would be disastrous,’ Kotick added.

Microsoft has already offered Sony a 10-year licence that would allow Call of Duty to feature on PlayStation consoles as the software giant looks to expand its growth scope.

Meta faces its own troubles after a potentially damaging EU ruling that could hit Facebook and Instagram revenues hard. EU privacy regulators ruled that Meta should not demand Facebook and Instagram users opt into personalised advertisements based on online activity. Because Meta’s European headquarters is based in Ireland, it falls under the EU regulatory scrutiny.

If the ruling is upheld, it could see millions of users potentially opt-out of this type of targeting, leaving Meta with less user data to use to generate audiences for the tailored advertisements that analysts and those close to the business say account for the majority of its bookings.

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