FTC calls out Microsoft for its Xbox Game Pass price hike, says its “exactly the sort of consumer harm from the merger” it expected
The Federal Trade Commission (FTC) has called the recent Xbox Game Pass price changes "product degradation".
Earlier this month, Microsoft introduced new changes to its Xbox subscription service by increasing the prices of its membership tiers across the board, including Ultimate and a brand-new Standard tier that will replace the Console version.
Now, in a bid to appeal Microsoft's acquisition of Activision Blizzard last year, the FTC has submitted a new filing to the U.S. Court of Appeals for the Ninth Circuit, calling the latest move "consumer harm".
"Product degradation - removing the most valuable games from Microsoft's new service - combined with price increases for existing users, is exactly the sort of consumer harm from the merger the FTC has alleged," the latest filing reads, which refers to the FTC's attempt to block the deal before it was closed.
The FTC argues that the new Standard tier is "inconsistent" with what Microsoft promised, that being "the acquisition would benefit consumers" by making Call of Duty 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 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 file continues.
The FTC adds that "Microsoft’s price increases coincide with adding Call of Duty to Game Pass’s most expensive tier, and discontinuing the Console tier will happen shortly before releasing CoD’s newest game."
Microsoft recently confirmed that Call of Duty: Black Ops 6 will arrive on Xbox Game Pass day one for all members when it launches later this year, which will make it the first new game in the series to be brought to the service.
