The recent defeat of the United States Federal Trade Commission (FTC) in its attempt to block the merger between Microsoft and Activision Blizzard seems to be the last straw, as it marks the fourth consecutive loss for the regulator, a situation that was strongly questioned in the US Congress.
Video: Microsoft paid $70 billion for Activision Blizzard
Lina Khan is questioned about the FTC's decisive defeats
After suffering the verdict in favor of Microsoft's acquisition of Activision Blizzard, Lina Khan, the chair of the FTC, appeared before the Judiciary Committee of the US House of Representatives for the hearing on "Supervision of the Federal Trade Commission." One of the congressmen, Kevin Kiley from California, directly questioned the FTC's defeats and the fact that their actions cost taxpayers' money: "It seems like they are losing quite a lot, and I don't say this to be disrespectful, but after all, these are taxpayers' funds. Now they have 0 wins and 4 losses in merger cases. The average win rate of the FTC in the modern antitrust era is around 75%. So, I have to ask, why are they losing so much?"
FTC chair Lina Khan asked by Rep. Kiley if she's bringing antitrust merger cases to court that she knows she'll lose
— Stephen Totilo (@stephentotilo) July 13, 2023
Khan: "Absolutely not"
Losing on purpose?
"We fight hard when we believe there is a law violation."
Won't go into details re: Microsoft loss, given active case
In response, Khan stated that their actions and those of the regulator are not about fighting battles that are known to be lost from the beginning. She assured that if they decide to take mergers to court, it is because they believe there are risks of monopoly, commercial concerns, and even violations of the law.
Notably, the recent defeats of the FTC (via Davis Polk) regarding mergers include the acquisition of Fitness Within by Meta in the virtual reality sector, the acquisition of GRAIL, Inc. by Illumina, Inc. in the healthcare sector, the purchase of Change Healthcare by UnitedHealth in the medical and insurance services sector, and another one to consider during Lina Khan's tenure is the acquisition of Imperial Sugar Corp. by U.S. Sugar Corp in the sugar industry. In all of these cases, the FTC took the companies to court, and in all cases, there was defeat. The issue at hand is that all these processes are carried out with federal funding.
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