The Federal Trade Commission’s Antitrust Lawsuit Against the Proposed Microsoft/Activision Merger: Déjà Vu with a Surprise Ending

• Published date: 01 December 2024
• DOI: http://doi.org/10.1177/0003603X241285050
• Author: Victor Glass,Timothy Tardiff
• Date: 01 December 2024

https://doi.org/10.1177/0003603X241285050

The Antitrust Bulletin

2024, Vol. 69(2-4) 79 –89

© The Author(s) 2024

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DOI: 10.1177/0003603X241285050

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Commentary

The Federal Trade Commission’s

Antitrust Lawsuit Against the

Proposed Microsoft/Activision

Merger: Déjà Vu with

a Surprise Ending

Victor Glass* and Timothy Tardiff**

Abstract

In 2018, the United States Department of Justice filed an antitrust lawsuit against the $80–100 billion

merger between AT&T (a major cable provider) and Time Warner (a major content provider).

The government predicted that the merged company would foreclose content to competitors,

raise content prices, and slow innovation. The government lost the case because the court did not

accept its theory that the merged company would enjoy increased bargaining leverage that would

disadvantage competitors by offering the merged company’s content at increased consumer prices.

In 2022, the Federal Trade Commission (FTC) offered a similar rationale in seeking to block the

Microsoft/Activision Blizzard’s $68.7 billion merger. This paper compares and contrasts the two

mergers, as well as three vertical merger cases that occurred around the same time of the closing of

Microsoft/Activision, with the intent of highlighting the issues with assessing vertical mergers, with

particular focus on online industries.

Keywords

vertical mergers, foreclosure, merger commitments, gaming, online industries

I. Introduction

Microsoft and Activision closed a $69 billion merger on October 13, 2023, after clearing regulatory

hurdles in the United States, the United Kingdom, and Europe.1 The first roadblock occurred on

December 8, 2022, when the Federal Trade Commission (FTC) filed suit against Microsoft’s plan to

*Rutgers University–Newark, Newark, NJ, USA

**Advanced Analytical Consulting Group Inc, Boston, MA, USA

Corresponding Author:

Victor Glass, Rutgers University–Newark, 1 Washington Park, Newark, NJ 07102, USA.

Email: vglass@business.rutgers.edu

1285050ABXXXX10.1177/0003603X241285050The Antitrust Bulletin XX(X)Glass and Tardi

article-commentary2024

1. See, for example, Kellen Browning & David McCave, Microsoft Closes $69 Billion Activision Deal, Overcoming

Regulators’ Objections, N.Y. Times, Oct. 13, 2023, https://www.nytimes.com/2023/10/13/technology/microsoft-activision-

blizzard-deal-closes.html.