It has been more than 20 years since the U.S. government has had Microsoft in its antitrust crosshairs. The Federal Trade Commission (FTC), with consultation from the Justice Department’s Antitrust Division (DOJ), is currently scrutinizing Microsoft’s proposed $70 billion acquisition of Activision-Blizzard (ATVI). The acquisition would be the largest in history, and FTC Chair Lina Khan is not going to let it happen without a fight.
Khan is a well-known critic of Big Tech, and she has made it her mission to crack down on companies attempting to consolidate power. She is currently working to unwind Facebook’s acquisition of Instagram and WhatsApp and is looking to block these types of mega-mergers before the occur. This Microsoft deal may be a good opportunity for her to show her strength.
Khan is aware, though, that the FTC lacks resources, as compared to Big Tech, and that the tech sector often likes to embody the spirit of a runaway train that cannot be stopped. Microsoft’s CEO Satya Nadella argued that if Microsoft is to compete in the gaming sector, it must acquire new platforms to help do so.
While the FTC tends to be more lenient when it comes to vertical mergers, or “anticompetitive mergers” in which a hardware company acquires a software company, like Microsoft’s acquiring Activision-Blizzard, Khan is still wary that consumers may expect higher prices because of the proposed deal. Khan is also concerned that if this merger occurs, Microsoft may have incentive to implement exclusionary policies such as making popular games like Call of Duty available only on Xbox and PC but not on Playstation.
And Khan is not the only concerned party. Multiple groups, including Public Citizen and the Communications Workers of America, recently sent a letter to the FTC voicing their concerns regarding the merger. These groups are concerned that Microsoft may use its newfound leverage to raise gaming subscription prices and that Microsoft will have “negative implications for data privacy and surveillance advertising.” Plus, Activision workers recently mobilized to form a union, and if this merger happens, it may give Microsoft the power to quash their efforts.
