The FTC’s administrative complaint blocking Microsoft from finishing their purchase of Activision Blizzard King faces serious scrutiny from antitrust experts, given the statements FTC chair Lina Khan has given about it. Among those critics is the Michael Jordan of antitrust law, Douglas Melamed, speaking in a new interview about the case.
Melamed was a member for the antitrust division of the Department of Justice. When the DOJ sued Microsoft over antitrust violations in the 1990s, he was principal deputy assistant attorney general.
In that 1990s case, the DOJ accused Microsoft of trying to form a monopoly on personal computers, with their softwares Windows, and Internet Explorer respectively.
The case of United States v. Microsoft Corporation ran past the 1990s and was finally settled in 2001. While Melamed’s DOJ did not get a full conviction in the end, they agreed to a settlement that saw Microsoft end some of their more controlling practices. This included sharing their APIs with third parties and freeing up Microsoft users to choose their web browser, even uninstalling Internet Explorer.
Melamed says about that time that many people thought the DOJ was crazy to even try to bring that case. They pursued it because they were willing to run the risk of losing the case, if it meant there was a chance they could get Microsoft to change.
Today, Melamed says the situation is different. FTC chair Lina Khan surprised him when she said she was willing to take on losing cases such as the one for Microsoft’s purchase of Activision.
Unlike the DOJ back then, the thinking of the FTC now is if they lose cases like this one, it will prove to the US Senate that they need to revise the existing antitrust laws.
This was Melamed’s response to Khan’s statements:
“In this case, the commission really doesn’t seem to care about economics at all. This seems to be built entirely on anecdote. And the storytelling about it – I think all good litigators tell a good story, but in antitrust, typically you back that up with some numbers and some rigorous economic analysis and there’s no indication of that in the complaint. The commission intends (its intention for existing is) to do that.”
So, just so we’re clear on where we are. Melamed is saying arguments vs Microsoft’s purchase of Activision are not backed up by economic analysis or numbers, and is anecdotal at best. It isn’t as clear a case as the one they pursued in the DOJ years ago about Microsoft locking other developers out of Windows.
That includes this argument from Sony, which they passed on to the UK CMA for their investigation of the deal. It also means the biggest argument going around regulators, that gamers will move to Xbox because of Call of Duty and that will harm competition, also does not hold water.
You may disagree with former attorney Melamed’s conclusions here, but Khan seems to have brought up her own belief that they can’t win this case she filed vs Microsoft herself.
If this is where the FTC case ends, that would make it more likely for the regulators in UK and EU to also eventually approve the acquisition. This would be the situation if that case lays out how weak the arguments vs the purchase turn out to be.
It will definitely be interesting to see where this case, and the status of Microsoft’s acquisition itself, will be going into the new year.
Source: Straight Arrow News
