Scrutiny has grown considerably in recent months over the nearly $69 billion deal that was announced earlier this year. Last week Serbia joined Saudi Arabia and Brazil in approving the acquisition, but that has done little to relax tensions made manifest by the United Kingdom, European Union, and the United States. The American Federal Trade Commission stated in June that the agency would review the impact on workers, and unnamed insiders stated recently that an antitrust lawsuit intended to block the deal is “likely.” However, such a move would require a vote in favor of doing so, something the commission’s members are allegedly not in agreement about.
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The New York Post claims, citing unnamed sources, that a “rift has emerged,” among FTC commissioners, of which there are four. A panel that consists of one Republican and three Democrats is led by Presidential nominee Lina Khan, a vocal and consistent critic of Big Tech who has served since her confirmation in June of last year. Given the size and significance of the proposed deal, skepticism from Khan was expected, which almost certainly played a part in Microsoft signaling a willingness to negotiate concessions. Activision Blizzard is also keen to see the acquisition come to fruition, with an executive taking to Twitter recently to declare that the company is ready to “fight.”
However, alongside the sole Republican commissioner’s support come rumors that an unidentified Democrat may be leaning the same way. If this turns out to be true, it would substantially alter the approach undertaken by the FTC, perhaps opting to engage with Microsoft’s offer for concessions rather than seek to prevent the merger altogether. Political maneuvering is said to play a role in this, given that a tied vote would likely place Khan’s position as FTC chair in jeopardy.
No matter how events conclude in the United States, the United Kingdom’s Competition and Markets Authority seems increasingly convinced that the acquisition would harm consumers, echoing arguments made by Sony as the debate has become more publicized. The response from both Microsoft and Sony to the CMA’s Issues Statement was published near the end of last month and revealed what the involved parties were communicating behind doors that had been ostensibly closed until this point.
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Source: New York Post, Bloomberg
