Antitrust expert who defeated Microsoft says FTC's Activision deal strategy is 'nutty'

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(Image credit: Activision Blizzard)

What you need to know

  • Microsoft is currently attempting to acquire Activision Blizzard for almost $69 billion. 
  • The deal is undergoing regulatory review, with the FTC in the U.S. seeking to block the purchase.
  • Lina Khan, head of the FTC, has publicly stated she wants the agency to bring cases forward even when the evidence isn't strong.
  • Douglas Melamed, a former antitrust expert who helped bring a major successful case against Microsoft in the '90s, says the FTC's strategy is "nutty."

The back-and-forth of Microsoft's latest big purchase and associated legal drama won't be disappearing anytime soon, but another legal expert has weighed in on the matter. 

Speaking with Straight Arrow News (opens in new tab), antitrust expert Douglas Melamed appears extremely skeptical of the FTC's strategy in trying to block Microsoft's acquisition of Activision Blizzard. FTC head Lina Khan has publicly discussed bringing forward cases even when there isn't a large amount of evidence, something Melamed refers to as "nutty."

“I think that’s kind of nutty,” Melamed says. “I think if you lose cases, the most likely inference Congress is going to draw is either you brought bad cases or you don’t know how to litigate them.”

Melamed speaks from a position of experience dealing with antitrust specifically with Microsoft, having served as Principal Deputy Assistant Attorney General in the antitrust case brought against Microsoft in the '90s. The case was successful, though it was later partially overturned, with Microsoft reaching a settlement.

The FTC is currently in court arguing why Meta should not be allowed to purchase VR Fitness app Within, and will be arguing against Microsoft's purchase of Activision Blizzard in August 2023. Microsoft has repeatedly tried to assuage concerns, signing a deal to bring Call of Duty to Nintendo for 10 years and committing to the same for Steam, while offering a deal to Sony for PlayStation consoles. 

Microsoft has upped the pressure with labor agreements, signing a deal with the Communication Workers of America (CWA) and committing to staying neutral if Activision Blizzard employees decided to unionize starting 60 days after the completion of the merger. This neutrality has since been extended to existing to ZeniMax, the parent company of Xbox publisher Bethesda Softworks, which Microsoft acquired in March 2021. Over 300 Bethesda Softworks employees are unionizing, with a vote set for the end of the month.

Windows Central's take

I should preface this by emphasizing that I am not a lawyer or any other kind of legal expert. I don't know what different lawyers are thinking, I don't know what Microsoft Gaming CEO Phil Spencer is thinking, and I don't know what Lina Khan is thinking.

That being said, this doesn't feel like a great case. We've already seen the European Commission correct the FTC when the latter claimed Microsoft broke promises by making Starfield and Redfall Xbox console exclusives. Add in labor pressure, with the CWA and the AFL-CIO (opens in new tab) unions calling for the deal to go through, and I just don't see how the FTC has a shot. 

If other regulatory bodies approve the deal, it's going through. But it's going to take much longer than previously anticipated.

Samuel Tolbert is a freelance writer covering gaming news, previews, reviews, interviews and different aspects of the gaming industry, specifically focusing on Xbox and PC gaming on Windows Central. You can find him on Twitter @SamuelTolbert.