Microsoft is in the process of attempting to acquire Activision Blizzard in one of the biggest acquisitions in history. At $68.7 billion, it’s not just the biggest video game acquisition; it’s one of the largest of any kind across all business sectors. As such, the deal is facing regulatory scrutiny, including a lawsuit from the United States government’s Federal Trade Commission.
FTC chair Lina Khan was questioned by the Committee on Energy and Commerce this week, where she faced a question about Microsoft’s proposed buyout of the Call of Duty company. Khan was not able to speak directly about the deal because it’s in the midst of administrative proceedings, she said. As such, she said she would let the FTC’s official complaint speak for itself. That being said, Khan was able to share some high-level thoughts on what the FTC’s goal is.
Representative Diana Harshbarger, a Republican from Tennessee who signed a resolution to impeach President Joe Biden and voted to overturn election results from Donald Trump’s second presidency bid, asked Khan if it’s true that competition law is not supposed to protect an industry’s dominant player. Khan agreed. Harshbarger then asked why–in her belief–the FTC is taking action to protect Sony, which is one of the loudest opponents of Microsoft’s bid to buy Activision Blizzard.
Khan said it’s true that the FTC solicits feedback from all types of market participants, including “big players.” But in the end, the FTC tries its cases on the rule of law, Khan said.
“This case has also been voted out and is in administrative proceedings, so I’ll let the complaint speak for itself,” Khan said. “I will say as a general matter, we always really benefit from hearing market participants across the board, including big players. But at the end of the day, we always make our own independent judgments based on the law and the facts.”
Harshbarger pressed Khan on this after earlier asking questions about why the FTC ordered Illumnia to divest of its cancer-detection test maker Grail to help protect competition.
You can hear Khan’s comments in this video from the hearing.
Microsoft is no stranger to tussling with the US government. Years ago, in the landmark case of United States vs. Microsoft, the government claimed Microsoft operated a monopoly in the PC space and made it challenging for people to use non-Microsoft products on their computers. Microsoft eventually settled with the US and agreed to some remedies.
Some believe Microsoft might eventually reach a settlement and agree to remedies with the FTC in its Activision Blizzard case to get it done. However, the case remains pending and there is no official word as of yet.
The FTC claims Microsoft being allowed to buy Activision Blizzard could create a scenario in which Microsoft could “suppress” competition on console and cloud-gaming. An evidentiary hearing is slated for August 2, 2023.
In the UK, the Competition & Markets Authority is expected to hand down its final decision on Microsoft’s proposed buyout of Activision Blizzard by April 26. The CMA has already provisionally concluded that Microsoft’s efforts in the console space are not likely to be anti-competitive, but key concerns remain over the cloud gaming market. Keep checking back with GameSpot for more.
