Microsoft-Activision ruling highlights Lina Khan's struggles to fight tech

When a national justice connected Tuesday decided to reject the Federal Trade Commission's petition for a preliminary injunction to forestall Microsoft from completing its acquisition of Activision Blizzard, she besides rejected FTC Chair Lina Khan's imaginativeness of antitrust enforcement.

While the judge's ruling doesn't mean the woody is wholly successful the clear, since the FTC tin entreaty and the UK's contention enforcer has besides opposed the deal, it's indicative of the existential situation Khan's enforcement strategy faces successful the courts.

Fighting the $68.7 cardinal deal has been 1 of the FTC's biggest swings yet nether Khan, who President Joe Biden named seat successful 2021. Khan archetypal emerged successful antitrust circles for her critiques of however antitrust enforcement overlooked imaginable abuses by Amazon.

But adjacent arsenic galore successful Congress person go much unfastened to a antithetic presumption of antitrust successful the integer age, the courts inactive airs a large hurdle to newer theories astir however online companies tin amass and leverage powerfulness to stifle rivals.

Judge Jacqueline Scott Corley wrote that the FTC had not shown it was apt to prevail successful its administrative situation of the merger successful its interior proceeding, based connected the agency's presumption that the woody is apt to substantially lessen competition. The FTC has argued that Microsoft mightiness marque immoderate of its games exclusive to its ain crippled consoles oregon diminish the acquisition of Activision games connected rival services should the woody close. Microsoft has said it would alternatively marque the games much wide available.

Corley agreed with Microsoft's view.

"To the contrary, the grounds grounds points to much user entree to Call of Duty and different Activision content," she wrote.

She added that, "Despite the completion of extended find successful the FTC administrative proceeding, including accumulation of astir 1 cardinal documents and 30 depositions, the FTC has not identified a azygous papers which contradicts Microsoft's publicly-stated committedness to marque Call of Duty disposable connected PlayStation (and Nintendo Switch)."

The ruling means that the parties are person to being capable to implicit their merger by their July 18 deadline. But the FTC tin inactive appeal, and the companies indispensable inactive contend with the UK Competition and Markets Authority's absorption to the deal.

"We are disappointed successful this result fixed the wide menace this merger poses to unfastened contention successful unreality gaming, subscription services, and consoles," an FTC spokesperson said successful a statement. "In the coming days we'll beryllium announcing our adjacent measurement to proceed our combat to sphere contention and support consumers."

It's not the archetypal clip a justice has looked dubiously connected the FTC's antitrust enforcement theories nether Khan. A national justice besides ruled against the FTC's effort to artifact Meta's acquisition of virtual world fittingness app shaper Within Unlimited, which the bureau argued whitethorn lessen contention successful a nascent market.

Khan has continued to bring cases against tech companies that volition look akin hurdles successful the courts. The astir notable mightiness beryllium the agency's expected situation of Amazon's antitrust practices.

Khan's defenders rapidly critiqued Corley's decision. Matt Stoller, manager of probe astatine the American Economic Liberties Project, wrote connected Twitter that Corley "changed the law" successful penning that "the FTC indispensable amusement the merger volition astir apt substantially lessen competition." Stoller noted that the relevant merger law says the authorities indispensable amusement "the effect of specified acquisition whitethorn beryllium substantially to lessen competition, oregon to thin to make a monopoly."

"[W]hen a Biden justice - whose lad works astatine Microsoft - lets the biggest tech merger of each clip spell through, we person a superior occupation with the judiciary," Stoller wrote. Corley disclosed her son's job, which is not successful the gaming division, astatine a proceeding successful June.

Regardless of the critiques, the ruling is different illustration of a justice who is unconvinced of Khan's theories of however a tech institution tin leverage acquisitions successful adjacent markets to harm competition. That's the lawsuit adjacent erstwhile the justice was appointed by the aforesaid president who named Khan to the FTC.

With caller integer contention laws stalled successful Congress, overcoming judges' skepticism astir newer theories connected the exertion of existing laws volition apt stay enforcers' top challenge.

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WATCH: Judge denies FTC petition for preliminary injunction to halt Microsoft-Activision deal