(Bloomberg) -- The US Federal Trade Commission raised concerns over price increases to Microsoft Corp.’s video game subscription service in an appeals court filing.
Last week, Microsoft said it will raise the price of its Game Pass Ultimate to $20 a month from $17 in September. It’s also discontinuing its $11-a-month Console Game Pass, which will force players to either pay 81% more to switch to Game Pass Ultimate or accept a “degraded product,” the FTC said in a filing Thursday with the Ninth Circuit Court in San Francisco. Subscribers who want to play the upcoming installment of blockbuster game Call of Duty on the Game Pass when it releases, for example, may have to upgrade to a more expensive tier.
Microsoft’s Call of Duty plans were point of contention in the FTC’s suit over the software giant’s $69 billion bid for Activision Blizzard, which was approved last year. The FTC argued the deal was anti-competitive, claiming that Microsoft would leverage the top-selling game to stomp out competition. Microsoft said sharing Call of Duty widely was better for its business and the deal would benefit consumers.
“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 wrote.
The regulator is appealing the order allowing the deal to go through.
Microsoft did not immediately respond to a request for comment.
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