Lina Khan, Aiming to Block Microsoft’s Activision Deal, Faces a Challenge

In addition, Microsoft has made a number of concessions to reduce regulatory concerns about buying Activision — such as pledging that Call of Duty would be available on Sony’s PlayStation and Nintendo’s platforms, and not just on Xbox — which some judges may find persuasive.

“It’s undeniably a challenging lawsuit for the commission, because vertical challenges generally have an uphill battle,” said Bill Baer, who led the Justice Department’s antitrust division during the Obama administration and has represented Sony in private practice.

The case is shaping up as a test of Ms. Khan’s belief that the F.T.C. must become more aggressive to check the power of corporate giants in the modern economy, including the biggest tech companies. Appointed to lead the agency by President Biden, she has signaled she wants to take more lawsuits to court — instead of settling with companies — to push the boundaries of antitrust law and return to the kind of trustbusting not seen since the last century.

Since Ms. Khan took over the F.T.C. in June last year, the agency has employed novel or little-used arguments to challenge deals. It sued to block the merger between the chip makers Nvidia and Arm, another deal in which the companies were not direct competitors. In July, the agency sued to stop Meta, Facebook’s parent company, from buying the virtual reality start-up Within, in a case that hinges on an uncommon argument that the deal would harm competition in a market that hasn’t developed yet.

Microsoft has vowed to fight the F.T.C.’s lawsuit against the Activision purchase. On Thursday, Brad Smith, Microsoft’s president, said the company had “complete confidence in our case and welcome the opportunity to present it in court.” On Friday, Microsoft pointed to previous statements that it believes the deal would expand competition and create more opportunities for gamers and game developers.

Article source: https://www.nytimes.com/2022/12/09/technology/lina-khan-ftc-microsoft-activision.html