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Boston Herald
Boston Herald
14 Jul 2023
Ben Dennehy


NextImg:Dennehy: FTC’s loss is a win for gaming consumers

The Federal Trade Commission’s preliminary motion to stop Microsoft from acquiring Activision-Blizzard has been rejected. The case is now primarily considered resolved, as the courts deemed the FTC had not demonstrated that competition would be substantially affected. The injunction would have delayed the companies from merging. However, it is now expected that the two companies may begin fully integrating as early as this month.

For gamers, this represents a win through increased access to Activision’s gaming library.

Following this decision, the British Competition and Markets Authority (CMA) announced that it would reconsider the case after it had previously blocked the acquisition in the United Kingdom. If the CMA permits the deal, it will join the global consensus that the acquisition is not anticompetitive.

The FTC’s initial decision to bring the complaint can be partly attributed to the agency’s ideological opposition to mergers and acquisitions by large tech firms. This bias against large firms denies increased efficiency and consumer benefits achieved through size. Previously, such government overreach was mitigated by the reliance on the Consumer Welfare Standard (CWS). The current FTC chair has abandoned this concept in favor of measuring competition by relative size and a tendency to measure harm to competitors rather than consumers.

The CWS has been primarily attributed to the work of Robert Bork in his book “The Antitrust Paradox.” The main effect of antitrust enforcement was that actions taken by market actors were considered legal and competitive so long as they did not harm the consumer.

Microsoft’s continued and persistent litigation denied the consideration of whether the end consumer was harmed or benefited by this merger. The online gaming market is saturated with options for the consumer. With a wide range of price points and delivery methods, the market is certainly not monopolized by any company, and certainly not by Microsoft. In fact, many market experts suggest that Microsoft has fallen behind in recent years in its efforts to compete with Sony, which manufactures rival console gaming system PlayStation. Predictably, Sony has assisted gamers in suing Microsoft to halt the merger.

Microsoft has, in recent years, opted to invest heavily in cloud gaming options, of which this acquisition would play a major role in developing a more attractive content library for consumers. Access to popular gaming titles in one place, accessible on-demand without ever having to leave the comfort of your house, would benefit the consumer.

The decision to allow Microsoft to join with Activision Blizzard is a win for consumers. Additionally, this represents the latest rejection by courts of the FTC’s approach to competition regulation. There is a great deal for gamers and broader consumers alike to be optimistic about our courts, and today’s decision serves as a reminder.

Ben Dennehy is the communications manager at the American Consumer Institute/InsideSources