Microsoft's $69 Billion Worry

FTC chief Lina Khan is skeptical of big mergers such as its Activision deal and isn't afraid to stop them in court

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To many observers, the Federal Trade Commission under previous administrations was a paper tiger. But President Joe Biden’s FTC chair, Lina Khan, has been particularly vocal about the dangers of market concentration, and unafraid to go to the courts to back up her own skepticism. After some moderate successes halting deals among smaller companies, on Dec. 8 Khan launched her biggest challenge yet: a suit to block Microsoft Corp.’s $69 billion purchase of Activision Blizzard Inc.

The FTC suit argues that combining a top maker of game consoles with one of the largest online gaming companies could limit rivals’ access to the most popular titles, such as Activision’s blockbuster shooter Call of Duty. Microsoft has said it intends to vigorously contest the case, filed in the agency’s in-house court with a trial scheduled for next summer. And US antitrust officials have in the past failed to get courts to block deals between companies in adjacent markets. One example: the Department of Justice’s unsuccessful suit to scuttle the 2018 merger of AT&T Inc. and Time Warner.

Khan’s willingness to sue to halt deals has won her acclaim from progressives and politicians who believe prior administrations were too lax in their enforcement of antitrust laws. Today’s FTC has “a different default approach,” says Ben Sirota, an antitrust lawyer at Kobre & Kim. “In any industry they think is problematic or in a market that’s consolidated, the presumption going in will be to ask: ‘Can we challenge it?’ ”