Washington Examiner Op-ed: FTC Favors Competitors Over Competition in Fight Against Microsoft
Op-ed in the Washington Examiner by Committee for Justice resident fellow for competition and regulatory policy Rachel Chiu:
Microsoft announced it would acquire Activision Blizzard, a video game company and developer of the Call of Duty franchise, on Jan. 18, 2022. Over one year later, the $69 billion deal is awaiting regulatory approval from antitrust authorities who are too concerned about rivals.
In an effort to block the acquisition, the Federal Trade Commission filed a complaint late last year. Regulators argue that Microsoft has a history of withholding content from competitors and warn the acquisition will adversely affect the “new, burgeoning markets, including high-performance consoles, multi-game content library subscription services, and cloud gaming subscription services.”
But these concerns are pure conjecture. Microsoft President Brad Smith has rebuffed these claims, writing that the company has consistently prioritized “access to key technologies for competing services,” and he has pointed to the 2016 LinkedIn acquisition as an example.
In its response, Microsoft explained it has long lagged behind Sony and Nintendo. Purchasing Activision would enable Microsoft to expand into mobile gaming, for which it currently has “no presence.” For consumers, this would mean they could play popular video games without purchasing an expensive Xbox console. The filing concluded that the “acquisition of a single game by the third-place console manufacturer cannot upend a highly competitive industry,” especially since it made promises to keep content such as Call of Duty available to competitors. To demonstrate this commitment, Microsoft is continuing to enter into distribution deals.
This case is one of many recent skirmishes between regulators and disfavored companies. Meta clashed with the FTC for months over its acquisition of Within Unlimited. Last year, U.K. authorities forced the tech giant to divest from Giphy, claiming that no other remedy would suffice. Outside of the technology sector, regulators blocked the acquisition of a cancer screening startup . To prevent ostensibly large businesses from getting any larger, government officials are clamping down on mergers and acquisitions with unprecedented force, calling for deals to be blocked and for completed mergers to be undone without much consideration of the merits and consequences of such drastic government intervention...