With Microsoft Victory, Courts Go On Epic Killstreak Against FTC Antitrust Agenda
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pIn order for anbsp;player to be victorious at the end of anbsp;video game, he or she typically must defeat the imposing “final boss.” It seems Microsoft’s acquisition of video game giant Activision brought with it anbsp;real‐life version of anbsp;final duel with the Federal Trade Commission (FTC)./p
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pThe FTC’s actions to halt anbsp;proposed Microsoft‐Activision merger deal certainly risked ending the transaction in the same way anbsp;defeat can end anbsp;game for players. After going through many challenges and gaining approval from other competition regulators around the world, a href=https://storage.courtlistener.com/recap/gov.uscourts.cand.413969/gov.uscourts.cand.413969.305.0_4.pdfanbsp;California judge sided/a with the American consumer by rejecting the FTC’s argument and clearing anbsp;path to closing the deal./p
pThe real winner in the FTC’s defeat, however, is the consumers./p
pIn attempting to prevent the merger, the FTC had argued that the deal would harm competition in the video game industry. This aggressive attempt to stop the merger continued even after Microsoft had assured regulators Activision’s popular emCall of Duty/em would continue its presence on competitors’ consoles, such as Sony’s PlayStation./p
pThe court found the FTC did not meet the burden of proof required to justify anbsp;preliminary injunction that could pause the acquisition, which needed to close by July 18. Far from seeing the behavior that regulators alleged could lead to consumer harm, the court acknowledged that Microsoft “a href=https://storage.courtlistener.com/recap/gov.uscourts.cand.413969/gov.uscourts.cand.413969.305.0_4.pdfeven took steps to expand emCall of Duty/em to non‐Microsoft platforms/a.”/p
pThis decision echoes foreign regulators, including the stringent European Union, which has already approved the acquisition. Even the U.K.‘s Competition and Markets Authority, which had previously challenged the acquisition, has a href=https://www.theverge.com/2023/7/11/23791149/microsoft-activision-blizzard-uk-regulators-cma-appealagreed to pause its case and negotiate/a with Microsoft to resolve its concerns about the deal./p
pThe gaming market remains competitive with anbsp;wide variety of options available to them. Many factors, including the availability of games, go into anbsp;consumer’s decision about their gaming consumption. In addition to multiple console options, the gaming ecosystem also includes P.C. games and an increasingly popular mobile gaming market. The Microsoft‐Activision deal allows Microsoft to acquire popular franchises including emCall of Duty/em and emCandy Crush/em, but it will still face significant competition from Sony and Nintendo./p
pWhile this case may be the final boss that this deal needs to defeat, it is only the latest in anbsp;string of defeats for the FTC’s aggressive antitrust actions against America’s leading tech companies––actions that a href=https://www.forbes.com/sites/steveforbes/2023/06/30/ftcs-lawsuit-against-amazon-over-prime-is-part-of-bidens-massive-assault-against-free-enterprise/do not appear to be slowing down/a./p
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pThe gaming market remains competitive with anbsp;wide variety of options./p
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pBased on “the possibility Meta’s entry would influence competition” in the virtual reality fitness space, another court, an attempt to block Meta’s acquisition of V.R. company Within Unlimited, a href=https://www.cnbc.com/2023/02/01/ftc-loses-attempt-to-block-meta-acquisition-of-within.htmlrejected the agency’s theory/a of anticompetitive behavior. In 2021, the FTC unsuccessfully attempted to unwind the previously approved acquisitions of Instagram and WhatsApp by Meta (the agency was later allowed to a href=https://www.axios.com/2022/01/11/meta-ftc-antitrust-case-dismissal-failsproceed with anbsp;case following an amended complaint/a)./p
pDespite this growing losing record for such cases, like anbsp;video game player finding extra lives and excuses for poor performance, supporters of the agency’s cases like to claim that a href=https://www.hollywoodreporter.com/business/business-news/meta-within-ftc-challenge-legal-ruling-1235319297/these losses are actually “wins.”/a/p
pWhile the FTC loses in court, some members of Congress have been pursuing legislation that, in antitrust cases, would change the rules of the game for the agency in ways that would no longer benefit consumers and instead would favor less successful competitors./p
pIn fact, Senator Amy Klobuchar recently a href=https://www.congress.gov/bill/118th-congress/senate-bill/2033reintroduced the American Innovation and Choice Online Act (AICOA)/a, anbsp;bill that would target successful tech companies without the objective economic standards at the heart of the current consumer welfare approach. Instead of seeing antitrust laws as anbsp;way to ensure consumers benefit from free‐market competition, the theories from the FTC and proposals from Congress would allow the government to intervene much more, dictate the outcome they believe is best, and use antitrust against companies or industries for political purposes./p
pThe FTC’s losses have been consumers’ wins. The good news is that courts appear to remain committed to the objective analysis at the heart of the consumer welfare standard rather than more creative and potentially harmful theories put forward by the FTC. While this may be the final boss for the Microsoft‐Activision deal, the consumer welfare standard still has many more levels to fight./p
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