You can criticize the Federal Trade Commission all you want, but you have to give it props for keeping corporations such as Microsoft in check. Unfortunately, the way that it’s protecting the taxpayers from private companies who could potentially abuse their monopolistic privileges is borderline laughable. A case in point is its attempt to halt Microsoft’s $69 billion acquisition of Activision Blizzard.
The FTC just fumbled the ball, laid an egg, and was caught slack-jawed when its rushed appeal was just unceremoniously dismissed by the same judge that gave Microsoft the green light.
Microsoft maintained an impregnable stance, insisting that the FTC’s appeal failed to highlight a single legal error or any significant ground that could overturn the court’s decision. The judge, unsurprisingly, echoed Microsoft’s sentiment. While the FTC fights this losing battle in the US, the Competition and Markets Authority (CMA) in the UK is now believed to have entered negotiations with Microsoft, considering a potential reassessment of the case.
Yet, in the grand scheme of things, the CMA is unlikely to halt the acquisition. Similarly, the FTC’s chances of overturning a decision this monumental is close to zero, especially after their successive failures in court. This defeat has thrown FTC chair Lina Khan, the erstwhile rising star, under harsh scrutiny. The Microsoft Activision blunder likely marks the most significant failure of her tenure.
In a trial where the FTC presented an astonishingly weak case, the judge noted their position appeared to be more about shielding Sony and its PlayStation brand than championing consumers’ rights. The FTC’s lack of industry knowledge was glaringly evident. Their argument against Microsoft’s potential creation of exclusive “Christmas characters” only revealed their ignorance. Sony had recently struck a deal for exclusive characters, an industry practice that has been underway for years.
The FTC’s failure to convince anyone that Microsoft intended to backtrack on its promise to keep Call of Duty on all of its current platforms, especially the PlayStation, only served to highlight their lack of foresight and understanding. Their entire case, in essence, was nothing more than a reiteration of what Sony has been doing for years with its franchises.
The FTC’s floundering attempt to block the merger, in stark contrast to dozens of other countries approving the deal, also shone the spotlight on their inadequate legal groundwork. Despite this, the FTC has not yet conceded defeat, launching a third attempt to impede Microsoft’s acquisition of Activision Blizzard by applying for a ‘temporary stay’ on the acquisition at the Ninth Circuit Court of Appeals. This desperate effort, however, seems unlikely to bear fruit.
As the formal closing date of the current deal approaches (July 18), Microsoft and Activision are set to finalize their merger. Meanwhile, US politicians increase pressure on the FTC to abandon their futile fight, questioning the validity of objections presented when the courts have repeatedly denied them. The FTC’s intransigence is costing taxpayers, making their series of defeats in company merger cases a serious concern.
Despite the challenges and criticism, the FTC maintains that the court set an excessively high barrier for their case. They’re now arguing that the judge misunderstood critical aspects, such as subscription access to Call of Duty and the relevance of examining deals with cloud gaming rivals.
While Microsoft, in response, expressed disappointment over the FTC’s ongoing attempts to delay the acquisition, it has unequivocally pledged to fight back. All eyes are now on the impending ruling, which will undoubtedly shape the future of the gaming industry.
For now, though, with the end of this saga almost in sight, Microsoft’s acquisition of Activision Blizzard appears more likely than ever.
Unfortunately, fans shouldn’t hold out hope on Microsoft being able to force Activision Blizzard to bring Call of Duty and Diablo, among others, to the Game Pass anytime soon.
