A federal appeals court turned down the Trump-era antitrust team’s efforts to block Microsoft from acquiring Activision Blizzard in a $69 billion takeover.
The court says that the FTC regulators failed to produce solid evidence of harm and instead acted on their own prediction of how the merger may hurt competition.
Federal judges reject FTC’s theory and demand concrete proof of harm
A three-judge panel from the Ninth Circuit Court of Appeals ruled that the FTC failed to provide enough evidence after rejecting the agency’s request to block Microsoft’s $69 billion takeover of Activision Blizzard.
The federal antitrust regulators claimed that the merger would be unfavorable to competition. Still, the court demanded they bring clear and fact-based evidence rather than rely on hypothetical theories or predictions.
Circuit Judge Daniel P. Collins mentioned in a 40-page decision that the FTC “failed to make an adequate showing as to its likelihood of success on the merits as to any of its theories.” These comments showed how the agency lacked sufficient evidence to convince the court that Microsoft would withhold key Activision games like the Call of Duty franchise from competitor platforms or use its new position to dictate cloud gaming or subscription services.
Contrary to the FTC’s claims, Microsoft had already promised a 10-year agreement to keep “Call of Duty” available on Sony’s PlayStation, which the court viewed as a credible effort to maintain fair competition.
The court’s decision served as a warning to antitrust regulators who base their unruly restrictions on assumptions that companies may corrupt the merger terms and cause unfairness instead of proving their claims.
Other Big Tech antitrust cases continue under the legal spotlight
The court ruling against the FTC in the Microsoft-Activision case may seem like a setback. Still, it only motivates the Department of Justice to legally challenge the deals and practices of other Big Tech companies like Google, Apple, and Meta. These lawsuits show that the US government is keen on monitoring and restraining anti-competitive behavior by some of the most powerful companies in the digital economy.
Google, in particular, is the victim of two antitrust lawsuits whereby the DOJ claims that the company uses illegal tactics to protect its dominance as the biggest search engine and block fair competition with its digital advertising technologies.
The Appeals Court decision that went against the FTC in the Microsoft-Activision case may not have an immediate bearing on other cases targeting Big Tech companies. Nonetheless, it will certainly shape how judges preside over similar arguments in the future.
As we move forward, there will be growing pressure on the courts to be less inclined to favor regulators when they present arguments based on common sense rather than concrete evidence of actual or potential harm.
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