Divided FTC Rekindles Hopes for Microsoft-Activision Merger | Xbox One

The Federal Trade Commission is sure to be the first major regulatory authority to offer its opinion on Microsoft’s acquisition of Activision Blizzard King. And according to New York Post sources, the division within it could boost the endorsement of the deal.

Tough situation for Lena Khan

While Politico raised potential danger That the US competition regulator is not certifying the agreement, New York Post sources today raise a loophole that could prompt the FTC to validate the agreement.

At least one Democrat on the panel’s four members recently espoused a pro-merger view, according to a source familiar with the matter.

Federal Trade Commission Chair Lena Khan, who insiders deem somewhat skeptical of Big Tech, will find herself in a somewhat uncomfortable position.

According to the newspaper’s sources, in recent weeks Lina Khan has continued to press to prevent the merger between Activision and Microsoft. This jurist was appointed in 2021 by Joe Biden as president of the Federal Trade Commission Known in particular for blocking Facebook’s acquisition of Inside Unlimited this summer, deeming the acquisition “illegal” with the risk of limiting consumer choices and raising prices in the field of virtual reality.

Kristen Wilson, the sole Republican commissioner on the FTC, has indicated she favors a deal. But, according to a source familiar with the matter, at least one of the three Democratic commissioners on the committee appeared to be leaning Microsoft’s side lately.

The identity of the Democratic “dissident” could not be confirmed, but sources said she was Rebecca Slaughter, who served as the FTC’s acting chair until last year. By doing the math, the FTC could count 2 members and 2 members against the takeover.

So this tie would be the least of bad news for Microsoft because the outcome would effectively approve the agreement, but would also call into question Khan’s authority within the FTC. According to the newspaper, it is unlikely that Lena Khan would risk such a vote in the end.

Politics come into play

Rebecca Slaughter, Federal Trade Commission Commissioner

William Kovacic, the former head of the Federal Trade Commission, the current head of the regulatory authority will have almost no choice but to ratify the agreement.

Lena would do anything to make it happen. So instead of getting that vote, she would have passed a motion to approve the deal. The way out is to say, “We got a good deal and we only got it because we were mean.”

The New York Post notes that Microsoft has a habit of courting Democrats. In the 2020 election cycle, Microsoft gave away $13.8 million to Democrats and just $1.72 million to Republicans. By 2022, the company had given $4.1 million to Democrats and $1 million to Republicans, according to Open Secrets.

Rebecca Slaughter, the supposed “dissident,” was a former advisor to Democratic Senator Chuck Schumer. The latter, the Senate Majority Leader, reportedly met with Microsoft President Brad Smith this summer to discuss, among other things, the ongoing merger with Activision and its potential impact on the New York Stock Exchange. According to the former Federal Trade Commission chair, Chuck Schumer has contacted his former protege, Rebecca Slaughter.

In recent weeks, several elements have shown that Microsoft is willing to make concessions in order to ratify the agreement. In particular, it was the question of A 10-year deal for Call of Duty on PlayStation. If Microsoft is finally willing to give up on certain points, the FTC’s arguments could thus be undermined.

According to William Kovacic, the chances of the agreement being ratified are now about 70%. According to him, President Biden could ask someone like his antitrust advisor Tim Wu to push Khan to accept the proposal. The argument, the sources say, is that Microsoft can be trusted to keep its promises because of its responsible behavior in the past.

Whatever the case, things should settle down in the coming weeks since The FTC ruling is expected in January. It is expected to be in Europe and the UK in March 2023.