The battle between the FTC and Microsoft over the planned acquisition of Activision-Blizzard is significant for the future of big tech and antitrust regulations. Traditionally, the FTC has focused on the consumer welfare standard, but the appointments of Lina Khan and Jonathan Kanter have signaled a shift towards tougher scrutiny of big companies, especially in the tech sector.
Khan and his colleagues at the FTC are now looking beyond just pricing implications and considering other potential harms of market consolidation, such as harm to workers and small businesses. The FTC is concerned that an Xbox-exclusive Call of Duty could harm competition in the video game industry and that Microsoft’s Game Pass combined with the Activision-Blizzard deal could make Microsoft a dominant force in cloud gaming.
Despite Phil Spencer’s assurances that he is willing to strike a deal with PlayStation to keep Call of Duty on the platform, the FTC remains skeptical due to Microsoft’s past antitrust behavior with exclusives like red fall and star field. However, Microsoft’s position in the console market and the potential legal settlement with Sony regarding Call of Duty may weaken the government’s case.
The decision now lies with U.S. District Judge Jacqueline Scott Corley, who will determine whether to grant a preliminary injunction to stop the deal. If granted, it would be a significant antitrust victory for the FTC and its new approach under Khan. However, if the injunction is denied, it would be another blow to the FTC and antitrust authorities. Ultimately, this case will have important implications for future interactions between regulators and big tech companies.
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