Microsoft: Activision deal poses antitrust test

Why is the FTC trying to stop Microsoft from buying Activision?

Microsoft and Activision.
(Image credit: Hakan Nural/Anadolu Agency via Getty Images)

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Bill Gates is long gone from the helm, but Microsoft is back under federal scrutiny once again, said Therese Poletti in MarketWatch. The Federal Trade Commission last week sued to block its $69 billion deal to buy video-game maker Activision Blizzard, saying it "would let Microsoft suppress competitors of its Xbox business." That argument, "it would appear, has actual legs." When Microsoft bought Bethesda Softworks last year, "it made some of its popular games exclusive to Xbox and PCs," despite assuring European antitrust authorities "it had no incentive to withhold" games from rivals. Microsoft was corporate America's bad boy in the late 1990s when it battled the Justice Department over monopoly charges, but it has "portrayed itself as squeaky-clean for the past decade-plus" while the four other tech giants — Apple, Google, Meta, and Amazon — attracted federal attention. It seems Microsoft's run "as the 'white knight' of Big Tech" is over.

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The problem with the FTC's case is that video-game hardware makers have always made games too, said Scott Shackford in Reason. Claiming that suppresses competition reflects "a profound misunderstanding of the gaming industry." Going back to the 1990s, if you wanted to play Mario Kart, you needed a Nintendo. If you wanted Sonic the Hedgehog, you needed Sega. If the deal goes through, Microsoft's share of the gaming industry would rise to all of 10.7 percent, hardly a monopoly. The government is just "looking for any sort of justification to intervene" to prevent big companies from growing. Tech history "is filled with apparently dominant platforms that were toppled rapidly by competitive forces," said Jonathan Barnett in The Hill — without any help from the antitrust cops. Shares of every giant tech company, including Microsoft, have fallen dramatically in the past 12 months, as it becomes clear that the market is already identifying cracks in the tech giants' "purportedly invincible armor."

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