FTC Chair Defends the Agency's Record After Microsoft-Activision Ruling

Urian B., Tech Times 24 July 2023, 11:07 pm

LIna Khan, the Federal Trade Commission Chair, is defending the agency's record related to the recent incident regarding Microsoft's Activision Blizzard takeover. The defense was in response to the criticism it received due to it being unsuccessful in challenging the acquisition.

FTC Chair Khan Gave Insights on the Situation

According to the story by BNN Bloomberg, Khan reportedly gave a statement regarding the situation, saying that in federal court, they have lost two merger cases. It was also noted that they have brought between 13 and 20 cases to court as well.

This came during the question-and-answer session, which was answered by Khan. The inquiries happened after a speech at the Economic Club of New York with the Chair specifying that when it comes to their merger enforcement program, it was okay for them to lose two.

Reuters has reported how the FTC officials withdrew their case against Microsoft-Activision before the international agency judge. It was also noted that Ubisoft thinks that the acquisition pushing through was "good news."

It was also noted that for the preparation of the remarks, Khan avoided the FTC's recent losses as more emphasis was given on the number of deals that were abandoned after the agency filed a suit. This includes major cases like Lockheed Martin and its attempt to buy Aerojet Rocketdyne Holdings, which was a major rocket maker.

Microsoft and Activision weren't Direct Competitors

Khan also acknowledged the nature of the deal at hand, namely Microsoft's acquisition of Activision. It was noted that Microsoft didn't directly compete with Activision, which was a popular video games title that was played on rival consoles and also on the company's Xbox.

Because of Activision not being a direct competitor, it was noted that this was what made it more difficult for the FTC to challenge the acquisition. Khan also described how vertical mergers were basically just more difficult to litigate.

When Khan said this, she meant the deals that come between companies that exist in the same supply chain but are still not considered direct competitors. This happened as a federal judge ruled in favor of both Microsoft and Activision on July 11.

This was after the FTC challenged the deal, which resulted in a long delay since its initial announcement. Despite a federal judge already providing a ruling, it was noted that the agency is already appealing it.

The Companies have Yet to Close the Deal

So far, the companies have yet to close the deal due to the objections they face in other places, like the UK competition enforcers, which are also doing what the FTC is doing. During her appearance, Khan reportedly also emphasized the new merger rules that were unveiled.

Khan noted that the merger rules were unveiled by her agency as well as the Justice Department. It was noted that there has been criticism of the guidelines since they focused heavily on cases dating back to the 1960s and 1970s.

The FTC Chair remains that the decisions were still good law and that there was no expiration date. Khan then noted that the decisions remained good law unless a decision by the Supreme Court was overturned.