2023-07-16 04:00:05
Determined to defend competition law more actively, even if it means preventing a series of giant mergers, the dedicated American agency, the FTC, has just suffered a new setback in the Microsoft and Activision file, while its strategy is challenged by the Republican opposition.
A federal judge in San Francisco on Tuesday dismissed the Federal Trade Commission (FTC), which asked her to suspend the acquisition of the video game publisher Activision by Microsoft announced in January 2022.
“The FTC has not demonstrated that it is able to prove that this transaction was likely to weaken competition in this industry,” wrote Jacqueline Scott Corley, in her interim decision.
The agency appealed – rejected on Friday – and can also wait for the case to be examined on the merits, but its action is now very badly started.
In the two years since lawyer Lina Kahn was named president by President Biden, the FTC has failed in court to block a series of mergers or acquisitions, including the takeover of virtual reality specialist Within by Meta .
“The record is not good,” said John Lopatka, a law professor at Penn State University.
The FTC “takes an aggressive approach to transactions that would not have gone unchallenged by sticking to a conventional approach to antitrust law,” he says. “And those actions have been, on the whole, failures.”
Under the leadership of Lina Kahn, the regulator is trying to change the dominant doctrine for half a century in terms of mergers in the United States.
The current line tends to prevent the merger of two companies only if it is proven that it would cause manifest harm to consumers, a definition much narrower than that in practice before the 1970s.
– Battle lost? –
But the change desired by the Biden government, which aims to preserve competition as much as directly protect consumers, can only be concretely implemented via the courts, and not by law, because Congress almost systematically showers the rare initiatives on the subject.
“The (government) agencies cannot change things unless they convince the courts to follow them”, summarizes John Lopatka.
“It’s an uphill battle, which she’s probably going to lose,” adds Keith Hylton, a law professor at Boston University, regarding Lina Kahn, “because it would take her years, much longer than the duration of his presidency.
And the Republican opposition in Congress makes no secret of its hostility towards the 30-year-old, who would likely be landed in the event of a political alternation.
FTC official Lina Khan during a hearing before the House Judiciary Committee on Capitol Hill in Washington on July 13, 2023 (AFP – Brendan Smialowski)
“She is trying to break brutally with the norm that has made America successful,” said Republican elected House of Representatives Jim Jordan on Thursday during the hearing of Ms. Kahn, whose record he described as “disaster”.
At the same hearing, her colleague Kevin Kiley, also a Republican, accused her of squandering taxpayers’ money through risky legal proceedings.
“Our mission is to promote competition,” replied the interested party, impassive. “All we care regarding is companies complying with the law.”
The few major successes of the Biden government have come from proceedings brought by the Department of Justice, and not by the FTC, which led in particular to the publisher Penguin Random House to give up absorbing its rival Simon & Schuster.
The Justice Department also pushed insurance brokers Aon and Willis Towers Watson to back out of a union before the matter was even decided by a magistrate.
In the same way, “it is possible that the position of the FTC has a deterrent effect, which is not seen in the figures”, advances Keith Hylton.
For him, “if you make a merger more expensive”, partly because of significant legal costs to overcome the objections of the regulator, “you will have less”.
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