Energized US Agency Takes On Giants

The FTC is suing to block the merger of Nvidia and Arm as well as the purchase of virtual-reality startup Within by Meta (Facebook).


The Federal Trade Commission (FTC) has sued to block Microsoft’s $69 billion acquisition of the video game publisher Activision, yet another sign of more energetic antitrust action by the agency under the leadership of Lina Khan. The first hearing in the case should take place in August.

This bold initiative surprised some lawyers. American courts have in recent decades shown indulgence toward vertical integration, where buyer and target don’t compete but are in the same chain. Microsoft is the maker of the Xbox console, while Activision is a publisher of games, such as Call of Duty, played on the console. 

An Anglo-American with Pakistani roots, Khan, age 33, was appointed FTC chair by President Joe Biden in 2021. At the time a professor at Columbia Law School, she was already known for her antimonopoly research: As a student at Yale Law School, she published a fresh analysis in the Yale Law Journal titled “Amazon’s Antitrust Paradox,” and is considered part of the growing New Brandeis movement in antimonopoly enforcement.

The FTC is suing to block the merger of Nvidia and Arm as well as the purchase of virtual-reality startup Within by Meta (Facebook).

Perhaps to ward off potentially tougher enforcement, Microsoft leaders have offered a compromise of sorts: The company announced it would not withhold the hugely popular Call of Duty game exclusively for its Xbox customers, but would allow access for console competitors Nintendo and Sony.

Will such voluntary offerings be enough to satisfy the newly energized FTC? Unlikely. Khan has already pointed out that Microsoft hasn’t always kept promises. FTC lawyers note that in the 2021 purchase of ZeniMax in 2021, Microsoft reversed a similar pledge and announced that new games would only be available on its Xbox.

Will the arguments put forth by Khan and her team win over US judges? Unknown. Despite a rising tide of concern about concentration of market power, US courts have been accommodating. When the Department of Justice tried to stop the megamerger between ATT and Time Warner in 2017, the judge greenlighted the acquisition.          

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