FTC To Review Microsoft’s Activision $68.7B Deal, Testing New Merger Guidelines

Microsoft’s US$70 billion bid for Activision may be reviewed by the Federal Trade Commission (FTC) in what will become its first test to show its new approach to mergers since the joint consultation with the Justice Department’s Antitrust Division (DOJ) to review the merger guidelines, reported PYMNTS.

In the US, merger reviews are conducted by the FTC or the DOJ, depending on the sectors affected by the merger. If this merger is reviewed by the FTC, it will be the first big deal that FTC Chair Lina Khan, a noted critic of Big Tech, reviews from Amazon, Apple, Google, Meta, or Microsoft. 

Related: Microsoft-Activision Deal To Face Antitrust Scrutiny

Khan has already displayed a tough approach to big deals since she was appointed by President Joe Biden in June 2021. Her first case was Nvidia’s US$40 billion planned acquisition of Arm, which the FTC sued to block in December 2021. The deal may never go to trial as the parties are reportedly considering walking away given the increasing number of regulatory hurdles, including national security concerns in the UK.

The second example, from January, is Lockheed Martin’s US$4.4 billion takeover of Aerojet Rocketdyne Holdings.

Perhaps the strongest evidence of Khan’s intentions to scrutinize Big Tech companies is the current litigation where the FTC is seeking to unwind Facebook’s acquisitions of WhatsApp and Instagram. The FTC will face an uphill road to prove allegations of harm in the court, as the judge expressed in his opinion, “whether the FTC will be able to prove its case and prevail at summary judgment and trial is anyone’s guess.” However, if the regulator succeeds, it will be the biggest divestment since Standard Oil was ordered to break up in 1911.

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