Biden FTC Chair Suffers Major Losses After Picking Fight With Big Tech

Biden FTC Chair Suffers Major Losses After Picking Fight With Big Tech

John Hugh DeMastri on July 12, 2023

Federal Trade Commission (FTC) Chair Lina Khan has suffered several setbacks this year in her efforts to block acquisitions by Big Tech firms, The Wall Street Journal reported Wednesday.

A federal judge on Tuesday ruled against the FTC to permit Microsoft’s record-breaking $69 billion acquisition of video gaming titan Activision Blizzard, just months after a judge similarly struck down an FTC effort to block Facebook-parent Meta’s acquisition of a virtual reality startup, the WSJ reported.  Khan publicly criticized Big Tech firms and advocated for stricter antitrust enforcement against them prior to her ascension to FTC chair under President Joe Biden, and she has faced years of GOP allegations of partisan bias.

Khan has indicated a willingness to bring difficult, losable cases to court in order to force them to clearly delineate their stance on what counts as anticompetitive, the WSJ reported.

“I’m certainly not somebody who thinks that success is marked by a 100% court record,” Khan said at a May 2022 eventat the University of Chicago. “If you just never bring those hard cases, I think there is severe cost to that that can lead to stagnation and stasis.”

U.S. District Judge Jaqueline Scott Corely, who wrote the recent court ruling blessing the merger between Microsoft and Activision, questioned the vigor with which Khan’s FTC has pursued the case, according to the WSJ.

“This is for a shooter videogame,” the judge said, referencing Activision’s blockbuster Call of Duty franchise and noting that Microsoft had already made a commitment to sell the franchise to competitors, according to the WSJ.

The Microsoft-Activision merger is considered by many antitrust attorneys to be an example of a vertical merger — which involves companies in different stages of a supply chain for a product — something courts typically consider to be beneficial for consumers, the WSJ reported.

Khan and her counterpart at the Department of Justice (DOJ) have used novel legal arguments to challenge these sorts of mergers, and their poor track record could lead companies to start ignoring the threat of an antitrust challenge, the WSJ reported. The FTC used one such argument in its unsuccessful bid this past winter to block Meta’s acquisition of a VR startup, in which it challenged the deal on the grounds that it may harm future competition.

“It’s a very difficult and slow process to get judges to look at some of these novel theories,” Jennifer Rie, a senior litigation analyst at Bloomberg Intelligence, told the WSJ. Khan’s FTC “needs to pick better battles, battles where they have better evidence backing up their allegations.”

The FTC and DOJ challenged 10 mergers last year, an increase from six the year prior and eight in 2020, the WSJ reported. The agencies have challenged four such deals to date this year.

The FTC did not immediately respond to a Daily Caller News Foundation’s request for comment.