FTC Allegedly Blocked EU Settlement With Microsoft By Using Their Lawsuit

The FTC has apparently played politics with their lawsuit vs Microsoft, using it to prod the European Commission to decide in their preferred direction.

Among the regulatory bodies investigating the Microsoft acquisition of Activision Blizzard King, the three most important to clinching the deal are the US’ FTC, the UK CMA, and the European Commission for the EU. All three have been communicating with each other, but pursuing separate investigations, as is fitting for each market region’s laws and regulations.

The European Commission was scheduled to finalize and reveal their decision on April 11, 2023. Meanwhile, the CMA’s schedule was for April 26, 2023. The FTC themselves did not have to make a decision on the matter yet until spring, but pre-empted all other parties by suing Microsoft for the deal itself.

Based on our sources, the European Commission told the FTC in their latest communications that they were planning to start settlement talks with Microsoft about the matter. The following day, the FTC filed their lawsuit vs Microsoft.

As things stand, the FTC and Microsoft had not even started talking before this suit was filed, and the FTC did not do their due diligence in building a case vs Microsoft’s purchase. Their actions so far do not seem to be based on a compelling reason to stop Microsoft because of something they discovered about the deal, as much as it is about the regulator deciding to make an example of Microsoft.

An independent antitrust attorney Barry Nigro interpets this as an attempt “get out in front of the Europeans in an effort to shape the narrative”.

Both the FTC and the European Commission have declined to comment on the matter, and for good reason. Beyond the world of video games, this is a serious accusation that would raise questions if the regulators themselves are doing their jobs properly to keep the markets honest, or are merely acting to take bigger players in the market down, which, of course, is not always the same thing.

Microsoft, for their part, deferred to their prior statements, expressing confidence that they will eventually get the deal pushed through. Given that they recently subpoenaed Sony to go to FTC court, it seems the company has their own plans to get their own way, and possibly embarrass other entities in the process.

It would be easy to say that it would be entertaining to let these tech giants just fight, but as we were reminded this week, real jobs are on the line with these deals, and the results and their consequences are more than just entertainment.

Source: Video Games Chronicle,  Tech Going