what you need to know
- Microsoft is currently trying to acquire Activision Blizzard for almost $69 billion.
- The deal is under regulatory review, and the FTC in the US is seeking 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 is not strong.
- Douglas Melamed, a former antitrust expert who helped bring a major successful case against Microsoft in the 1990s, calls the FTC’s strategy “crazy.”
The swing of Microsoft’s latest big purchase and the associated legal drama won’t go away anytime soon, but another legal expert has weighed in.
Speaking with Straight Arrow News (opens in a new tab), antitrust expert Douglas Melamed seems extremely skeptical of the FTC’s strategy to try to block Microsoft’s acquisition of Activision Blizzard. FTC Director Lina Khan has publicly discussed filing cases even when there isn’t a great deal of evidence, something Melamed refers to as “crazy.”
“I think that’s a little crazy,” says Melamed. “I think if he loses cases, the most likely inference Congress will draw is that he filed bad cases or doesn’t know how to litigate them.”
Melamed speaks from a position of experience handling antitrust specifically with Microsoft, having served as Principal Assistant Attorney General in the antitrust case brought against Microsoft in the 1990s. The case was successful, though it was later partially dismissed and Microsoft came an agreement.
The FTC is currently in court arguing why Meta should not be able to buy the VR Fitness Within app, 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 Steam, while offering a deal to Sony for PlayStation consoles.
Microsoft has increased the pressure with labor agreements, signing an agreement with the Communication Workers of America (CWA) and pledging to remain neutral if Activision Blizzard employees decide to unionize after 60 days after the merger is finalized. This neutrality has since extended to ZeniMax, the parent company of Xbox publisher Bethesda Softworks, which Microsoft acquired in March 2021. More than 300 Bethesda Softworks employees are unionizing, with a vote set for the end of the month.
Windows Central’s opinion
I must preface this by emphasizing that I am not a lawyer or any other type of legal expert. I don’t know what the different lawyers are thinking, I don’t know what Microsoft Gaming CEO Phil Spencer is thinking, and I don’t know what Lina Khan is thinking.
That said, this doesn’t feel like a great case. We’ve already seen the European Commission correct the FTC when the latter claimed that Microsoft broke its promises by making Starfield and Redfall Xbox exclusives. Add job pressure, with the CWA and AFL-CIO (opens in a new tab) the unions are calling for the deal to go through, and I just don’t see how the FTC stands a chance.
If other regulatory bodies approve the deal, it will go through. But it’s going to take much longer than previously anticipated.