by what you need to know
- Microsoft is currently trying to acquire Activision Blizzard for nearly $69 billion.
- The deal is under regulatory scrutiny, with the FTC in the US trying to block the purchase.
- Lina Khan, head of the FTC, has publicly stated that she wants the agency to bring cases even when the evidence isn’t strong.
- Douglas Melamed, a former antitrust expert who helped lead a major winning case against Microsoft in the ’90s, says the FTC’s strategy is “insane.”
The back-and-forth of Microsoft’s latest major purchase and the legal drama that came with it isn’t going away anytime soon, but another legal expert has weighed in on the matter.
Speaking to Straight Arrow News (opens in new tab)antitrust expert Douglas Melamed is extremely skeptical about the FTC’s strategy of blocking Microsoft’s takeover of Activision Blizzard. FTC chief Lina Khan has publicly discussed bringing cases even when there isn’t much evidence, something Melamed calls “crazy.”
“I think it’s kind of crazy,” says Melamed. “I think if you lose cases, the most likely conclusion that Congress will reach is that you either brought bad cases or you don’t know how to process them.”
Melamed speaks from a position with experience dealing with antitrust law, particularly at Microsoft, having served as deputy assistant attorney general in the Microsoft antitrust case in the 1990’s. The case was successful, although it was later partially overturned when Microsoft reached a settlement.
The FTC is currently arguing in court as to why Meta shouldn’t be eligible to buy VR fitness app Within and will argue against Microsoft’s August 2023 purchase of Activision Blizzard. Microsoft has repeatedly tried to assuage concerns, signing a deal to bring Call of Duty to Nintendo for 10 years and committing to doing the same for Steam while offering a PlayStation console deal to Sony.
Microsoft has upped the pressure with labor contracts, signing a deal with the Communication Workers of America (CWA) and pledging to remain neutral if Activision Blizzard employees decide to unionize 60 days after the merger closes. That neutrality has since been extended to ZeniMax, the parent company of Xbox publisher Bethesda Softworks, which Microsoft acquired in March 2021. Over 300 Bethesda Softworks employees are unionizing, with a vote scheduled for later this month.
The setting of Windows Central
First of all, I would like to emphasize that I am not a lawyer or any other legal expert. I don’t know what various attorneys are thinking, I don’t know what Microsoft Gaming CEO Phil Spencer is thinking, and I don’t know what Lina Khan is thinking.
Other than that, this doesn’t feel like a great case. We’ve already seen the European Commission correct the FTC when the latter claimed Microsoft broke promises by making Starfield and Redfall exclusive to Xbox consoles. Add the pressure of work with the CWA and the AFL-CIO (opens in new tab) Unions are demanding the deal go through and I just don’t see how the FTC would stand a chance.
If other regulators approve the deal, it will go through. But it will take much longer than previously thought.
