From: lessgovt@gmail.com   
      
   Lina Khan Is Taking on the World’s Biggest Tech Companies—and Losing   
   By Dave Michaels, July 12, 2023, WSJ   
   WASHINGTON—Federal Trade Commission Chair Lina Khan is taking on the   
   world’s biggest tech companies—and losing.   
      
   Khan failed Tuesday in her latest effort to block a big-tech deal when a   
   federal judge denied her agency’s bid to block Microsoft from closing its   
   purchase of videogame publisher Activision Blizzard. The FTC, which is   
   appealing, suffered a similar    
   setback earlier this year when it tried to thwart Meta Platforms’ purchase   
   of a virtual-reality gaming company.    
      
   Khan, who gained prominence as a critic of Amazon, took office in 2021 vowing   
   to stiffen antitrust enforcement. Past enforcers were too cautious about   
   bringing tough cases, and failed to confront the rise of companies such as   
   Facebook owner Meta that    
   gained monopoly-like power in digital industries, she has said.   
      
   “I’m certainly not someone who thinks success is marked by a 100% court   
   record,” Khan said last year in remarks at 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.”   
      
   Khan is set to testify Thursday before the House Judiciary Committee, whose   
   Republican leadership is investigating her agency’s oversight of Twitter and   
   her adherence to federal ethics rules. Republicans say the FTC is harassing   
   Twitter over data-   
   security practices and because Khan and other progressives are unhappy with   
   Elon Musk’s acquisition of the company.   
      
   Khan is also expected to be grilled on her antitrust record, including the   
   case against Microsoft, and her decisions to not recuse herself from cases   
   involving Amazon and Facebook owner Meta, both companies she publicly   
   criticized.   
      
   Under the Biden administration, antitrust agencies have challenged more   
   mergers than in previous years, including some that historically the   
   government wouldn’t have tried to block. Microsoft and Activision aren’t   
   head-to-head competitors, making the    
   case against the deal less straightforward and more dependent on the FTC’s   
   prediction that the combined company would abuse its power to hurt competition   
   in the future.    
      
   In her opinion issued Tuesday, U.S. District Judge Jacqueline Scott Corley   
   wrote that the FTC failed to show evidence backing up its claim that Microsoft   
   was likely to withhold Activision’s blockbuster games from competitors such   
   as Sony. The judge    
   found instead that Microsoft had made commitments to share Activision’s   
   content, which would expand consumers’ access to its biggest game franchise,   
   Call of Duty.   
      
   Douglas Farrar, an FTC spokesman, said the merger posed a “clear threat”   
   to competition. Late Wednesday, the agency filed a notice that it would seek a   
   review of Judge Corley’s decision from the Court of Appeals for the Ninth   
   Circuit.   
      
   Activision said it was confident “the U.S. will remain among the 39   
   countries where the merger can close. We look forward to reinforcing the   
   strength of our case in court, again.” The 27-member European Union and a   
   number of other countries have    
   allowed the deal to go forward; the U.K. hasn’t.   
      
   Antitrust lawyers say the FTC’s case against Microsoft resembles an earlier   
   attempt to block a gargantuan media deal: AT&T’s acquisition of Time Warner.   
      
   Both cases were examples of vertical mergers, a type of deal that courts   
   generally regard as beneficial to consumers. When a vertical deal looked   
   problematic, the government often sought a company’s commitment to maintain   
   the status quo regarding    
   competition. The Justice Department’s 2017 lawsuit to block AT&T-Time   
   Warner’s deal was the first litigated vertical-merger challenge in 40 years.   
      
   Both cases also involved claims that the buyer would harm competition by   
   making must-have entertainment exclusive to its own platform or devices. That   
   didn’t work for the Justice Department, which lost the A&T case at a   
   district court and on appeal.   
      
   Corley at one point questioned why the FTC put so much emphasis on what would   
   happen to Call of Duty. “This is for a shooter videogame,” she said.   
   Microsoft wouldn’t be able to make Call of Duty exclusive because it had   
   already committed to selling    
   it to Sony and others, she wrote.   
      
   The FTC could continue to pursue a separate lawsuit against the deal in its   
   in-house, or administrative, court. More often than not, the FTC drops its   
   administrative case after a federal judge denies an injunction blocking the   
   deal.   
      
   The FTC and the Justice Department challenged 10 mergers in court last year,   
   up from six in 2021 and eight in 2020, according to data compiled by law firm   
   Dechert. This year, the agencies have sued to block or undo four deals,   
   involving Amgen, JetBlue,    
   Intercontinental Exchange and a Louisiana hospital system, according to   
   government data.   
      
   Antitrust experts expect Khan to continue bringing tough cases because she   
   wants courts to expand how they view competitive harm. Merger case law puts   
   too much emphasis on whether a deal will lead to higher prices for consumers,   
   she says. Khan wants the    
   law to consider other problems that might flow from consolidation, including   
   lower wages for workers, diminished innovation and lower levels of service or   
   quality.   
      
   “It’s a very difficult and slow process to get judges to look at some of   
   these novel theories,” said Jennifer Rie, a senior litigation analyst at   
   Bloomberg Intelligence. The FTC “needs to pick better battles, battles where   
   they have better    
   evidence backing up their allegations.”   
      
   Khan’s FTC and the Justice Department are expected to soon issue new   
   guidelines that will provide a deeper dive into their views on m   
   rgers—giving companies a better idea of which deals will be allowed or   
   challenged.   
      
   The guidelines are designed to support future merger challenges. But Khan and   
   her counterpart at the Justice Department, Assistant Attorney General Jonathan   
   Kanter, also need to win some of their novel cases before the end of the Biden   
   administration’s    
   term or companies will begin to tune out their warnings, attorneys say.   
      
   “There has been progress, but there has also been these losses,” said   
   Diana Moss, president of the American Antitrust Institute, which advocates for   
   stricter antitrust enforcement. “The clock is ticking.”   
      
      
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