July, 11 2023, 12:58pm EDT
For Immediate Release
Contact:
Robyn Shapiro,,rshapiro@economicliberties.us
FTC Must Pursue Administrative Case Against Unlawful Microsoft-Activision Merger
Following news that Judge Jacqueline Scott Corley of the Northern District Court of California has denied the Federal Trade Commission’s request for a preliminary injunction of Microsoft’s $69 billion acquisition of video game publisher Activision, the American Economic Liberties Project released the following statement.
“When Microsoft’s own emails say they are building a ‘moat’ and trying to ‘spend’ their competitors ‘out of business,’ that should be enough for the court to hit pause. The fact that Judge Corley’s son works for Microsoft taints the outcome at a time when judicial ethics are top of mind for many,” said Lee Hepner, Legal Counsel at the American Economic Liberties Project. “The FTC should appeal this decision and pursue an emergency stay of Judge Corley’s Order so that it can continue its administrative case against Microsoft’s monopoly ambitions.”
In December 2022, the Federal Trade Commission sued to block Microsoft’s $68.7 billion acquisition of Activision-Blizzard, a merger that would combine two of the largest game developers in the world. Activision — thanks to a merger with Blizzard in 2008 — publishes some of the world’s most popular AAA game titles. Already, Microsoft is the third largest game developer globally, already owns around 30 gaming studios, and owns the Xbox gaming platform.
In April 2023, the UK Competition and Markets Authority blocked Microsoft’s acquisition of Activision-Blizzard after a robust investigation. Despite the decision, now under appeal, Microsoft has signaled it still intends to close the deal by July 18. That threat led the FTC to seek a preliminary injunction to halt the deal in June 2023.
With Xbox and Activision-Blizzard’s massive catalog of games, this merger would allow Microsoft to capture and dominate a large portion of the cloud gaming industry, consolidating it into a small group of firms who control walled gardens of content, data, and advertising. Microsoft could use this power to withhold the must-have games and products of Activision Blizzard from other consoles, restricting them to be exclusive to Microsoft’s cloud gaming platforms. The merger would likely raise prices down the line for gamers and give Microsoft crucial power over consumer data — knowing well that consumers’ alternatives are scarce and expensive.
Learn more about Economic Liberties here.
The American Economic Liberties Project works to ensure America's system of commerce is structured to advance, rather than undermine, economic liberty, fair commerce, and a secure, inclusive democracy. Economic Liberties believes true economic liberty means entrepreneurs and businesses large and small succeed on the merits of their ideas and hard work; commerce empowers consumers, workers, farmers, and engineers instead of subjecting them to discrimination and abuse from financiers and monopolists; foreign trade arrangements support domestic security and democracy; and wealth is broadly distributed to support equitable political power.
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As the U.S. Federal Reserve again declined to lower its interest rate, progressive economists, politicians, and activists on Wednesday implored the Fed to throw working-class Americans a lifeline by implementing multiple rate cuts this year.
Fed officials said after a meeting Wednesday that while inflation has fallen toward target levels, they only envision one rate cut for the rest of this year—down from the three cuts they previously projected. The Fed rate currently stands at 5.25%-5.5%.
The Associated Pressreported:
The scaled-back estimate for rate cuts came as something of a surprise, given that the government reported earlier Wednesday that consumer inflation eased in May more than most economists had expected. That report suggested that the Fed's high-rate polices are succeeding in taming inflation.
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"Most of the pain will be borne by lower-wage workers and the poor," Reich continued. "Researchers at the [International Monetary Fund] estimate that the unemployment rate may need to reach 7.5%—double its current level—to end America's inflation crisis. This would be about 6 million job losses. And low-wage working people will take it on the chin because they are usually the first to be fired."
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Other economists and economic justice advocates agreed.
"Only one rate cut this year would be a major misstep," said Bilal Baydoun, director of policy and research at the Groundwork Collaborative, a progressive economic think tank. "Families need relief from high borrowing costs now. [Fed Chair Jerome] Powell is making it harder for families to get by."
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Key members of Congress this week also called on the Fed to slash interest rates for the sake of working Americans.
Congressman Brendan Boyle (D-Pa.), the ranking member on the House Budget Committee, said in a statement Wednesday that
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Earlier this week, Sens. Elizabeth Warren (D-Mass.) , Jackie Rosen (D-Nev.), and John Hickenlooper (D-Colo.) wrote to Powell urging interest rate cuts.
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U.S. Sen. Bernie Sanders on Wednesday led 31 Senate Democrats in a letter calling on the agency that facilitates labor and management relations within the country's railroad and airline industries to allow flight attendants to strike if necessary.
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The senators suggested that "airline carriers do not feel pressured to reach agreements quickly, likely because the flight attendants' ability to strike has rarely been allowed to be exercised," with the NMB only allowing two strikes since 2006, "compared to dozens of instances in the 1980s and 1990s."
"Therefore, we join with our 178 colleagues in the House to urge the board to use all of the tools at your disposal, including releasing parties from mediation as necessary, to resolve these long-pending contract negotiations," they wrote, referencing a May letter led by Rep. Melanie Stansbury (D-N.M.).
Union leaders in the industry have praised both the House and Senate efforts. Thanking Sanders for spearheading the latest letter, Sara Nelson, president of the Association of Flight Attendants-CWA, which represents nearly 55,000 workers at 20 airlines, said Wednesday that "when negotiations drag on for three to more than five years it's clearly time to call the question."
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Julie Hedrick, national president of the Association of Professional Flight Attendants (APFP), which represents 28,000 American Airlines workers, stressed that "contract negotiations must have reasonable deadlines in order for both parties to be motivated to reach an agreement."
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