Court Decision on Microsoft and Activision-Blizzard Underscores FTC’s Isolation, Overreach, and Partisanship on “Competition” Matters

By SBE Council at 12 July, 2023, 9:59 am

NEWS

For Immediate Release

Washington, D.C. – On July 11, a Federal District Court in San Francisco ruled against the Federal Trade Commission (FTC)’s efforts to block Microsoft’s acquisition of Activision-Blizzard, rejecting the regulatory agency’s request to issue an injunction against the deal’s closing, which could occur over the coming days. In her opinion, Judge Jacqueline Scott Corley noted that the FTC failed to show how the acquisition would harm competition. In fact, the judge concluded that it would likely result in “more consumer access to Call of Duty and other Activision content.” According to the Small Business & Entrepreneurship Council (SBE Council), the FTC under Lina Khan’s leadership continues to push the boundaries of common sense through its partisan, wasteful and ideological actions, thereby harming the productivity and vibrancy of the U.S startup and merger and acquisition ecosystems in the process.

SBE Council president & CEO Karen Kerrigan said:

“Rather than applying the facts, common sense and logic when it comes to mergers and acquisitions that make sense for startups and consumers, FTC Chair Lina Khan sees nefarious intent and bizarre outcomes as she stares into her ideological crystal ball. It should be obvious by now that Chair Khan’s partisan agenda is not only extreme, but extremely damaging to U.S. innovative and tech leadership, which is driven by the risk-taking and creativity of entrepreneurs.”

Kerrigan added that she looks forward to increased oversight and scrutiny by Congress, including a House Judiciary Committee hearing scheduled for July 13 where Chair Khan will provide testimony and answer questions from committee members.

“It’s clear Chair Khan needs to be schooled in basic economics and markets. The courts have consistently dealt her agenda a serious blow, but she continues to pursue illogical and partisan actions despite the humiliating outcomes. The short-term damage to market and regulatory certainty is harming investment, positive acquisition activity, and the dreams and risk-taking of many startup entrepreneurs. We hope steady oversight by Congress will temper Khan’s damaging agenda,” said Kerrigan.

SBE Council chief economist Raymond J. Keating observed:

“This court decision isn’t just a win for Microsoft and Activision-Blizzard. It’s a win for sound economic policy, with positive implications for entrepreneurial technology businesses. The video-gaming industry has flourished due to entrepreneurs, businesses and investors inventing and innovating in order to serve consumers. That continues. And an essential ingredient to attracting the necessary capital to startup and build these kinds of tech companies is the eventual possibility of a merger or acquisition. The FTC, under the activist leadership of Biden-appointee Lina Khan, fails to grasp these market basics. Thankfully, the federal court stuck to the basics on antitrust law.”

Keating added:

“The key to flourishing, competitive markets, with firms of all types and sizes working and innovating to serve consumers, isn’t more hyper-regulatory activity and dictates. Instead, policymakers should be encouraging investment and a healthy M&A system, which benefits our economy, the startup ecosystem and consumers.”

Related SBE Council content:

Collateral Damage in Khan’s FTC War on Big Business: Entrepreneurship, Innovation, and Consumers, Small Business Insider blog post, December 16, 2022.

FTC’s Antitrust Crusade Against Microsoft Acquisition of Activision-Blizzard is No Game, Small Business Insider, January 11, 2023.

Innovation and Startup Ecosystem at Risk: Revamping the U.S. Regulatory Framework, Summary of SBE Council M&A Revamp Event.

CONTACT: 

Karen Kerrigan, kkerrigan@sbecouncil.org

Raymond Keating, rkeating@sbecouncil.org

SBE Council is a nonpartisan advocacy, research and education organization dedicated to protecting small business and promoting entrepreneurship. For nearly 30 years, SBE Council has worked on and advanced a range of private sector and public policy initiatives to strengthen the ecosystem for strong startup activity and small business growth.

Visit www.sbecouncil.org for additional information. Twitter: @SBECouncil

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