The FTC has confirmed that their chairperson Lina Khan met with the CMA before they laid down their ruling on the Microsoft – Activision deal. This was earlier revealed by Activision Blizzard King CEO Bobby Kotick in an interview with CNBC.
This is the transcript of Kotick’s statements on CNBC show Squawkbox:
“Well, I was surprised to learn that Lina Khan and the head of the CMA had a meeting a week and a half ago in Washington. You know, legally, you’re not supposed to be discussing active litigation. I don’t know that they did. But, you know, I think that that’s what you’re seeing now is that the CMA is being used as a tool by the FTC to be able to create these kinds of outcomes, and it this isn’t the way that they’re supposed to be operating.”
Earlier in the interview, Kotick expressed a loss of trust that the regulators were acting in their countries’ best interests:
“You know, I think what we found through this process is that these regulators are now taking dogmatic positions, that they don’t serve the interest in the missions of what they’re actually established to do.”
Now, some of you reading this may doubt that this is about helping US or UK economies. It may seem that this is wholly self-serving talk on Kotick’s behalf to get his deal to go through. Well, in this interview he once again makes the case for why companies like Microsoft and Activision are looking for these deals:
“I think at some point, you’re gonna start to see the regulator’s realize that we’re seeing enormous amount of high paying jobs getting lost from tech companies. You’re starting to see the foreign competitors, I look at Alibaba’s breakup.
Alibaba now has six separate companies, each of which is very well situated to compete effectively on the globe in the global market, including in games. I look at ByteDance, Tencent. These are the best companies in their industries in the world.
You know, I think the estimates for ByteDance operating profits this year are $30 billion. They have exceptional talent, technology. For American companies to be able to effectively compete we have to be able to have consolidation and have these kinds of mergers.”
As reported by Reuters, this is FTC spokesperson Douglas Farrar’s statement denying any sort of collusion:
“The FTC absolutely did not collude with the CMA or any other international regulator on any proposed merger review. When a deal appears blatantly anticompetitive then independent antitrust regulators can simply make their own judgments.”
The FTC does have a prior arrangement to discuss issues of competition and regulation with the CMA dating from 2019. While this accounts for the meeting being above level, we would still have to take the FTC’s word that neither Lina nor FTC’s representatives made some deal or arrangement with the CMA about the Microsoft – Activision deal.
The CMA just blocked the Microsoft Activision deal a few weeks ago, and the FTC sued to stop the deal from happening months ago. Both will now be going to the courts, as Microsoft and Activision have pledged to pursue this deal.
Earlier in the month, Lina Khan was asked about the FTC’s choices in regards to the Microsoft – Activision deal in the Congressional House hearing deliberating on increasing the FTC’s budget.