Microsoft-Activision Deal to Be Reviewed by Federal Trade Commission

The FTC, led by Chairwoman

Lina Khan,

will scrutinize whether the tech giant’s move to expand its videogame business will substantially lessen competition, this person said. All proposed mergers of substantial size must be submitted for government antitrust review, which is conducted by either the FTC or the Justice Department. Both agencies have closely scrutinized tech deals in the past. Bloomberg earlier reported on the FTC’s review.

A Microsoft representative declined to comment. Activision didn’t immediately respond to a request for comment. The companies have previously targeted 2023 for closing the transaction.

Since assuming office last summer, Ms. Khan has taken several steps to increase scrutiny of deals and reorient the agency’s enforcement posture.

“While the current merger boom has delivered massive fees for investment banks, evidence suggests that many Americans historically have lost out, with diminished opportunity, higher prices, lower wages, and lagging innovation,” Ms. Khan said on Jan. 18, announcing a broad reconsideration of U.S. policy toward mergers.

The moves have increased uncertainty about which mergers will win approval and how long those approvals will take.

At the same time, FTC officials say they are inundated with proposed mergers, taxing the agency’s staff. The FTC has separately been reviewing

Amazon.com Inc.’s

proposed acquisition of Hollywood studio MGM since last summer.

Both the Amazon and Microsoft deals could test whether Ms. Khan can translate her calls for tougher antitrust enforcement as a private citizen into results as a policy maker. Ms. Khan built her reputation as a critic of what she said was an overly permissive stance toward mergers in previous administrations, particularly in the technology sector.

Antitrust scholars say courts have been skeptical of challenges to large mergers in recent years.

Ms. Khan has signaled she won’t be shy about taking cases to court. “You lose all the shots you don’t take,” she said in a Jan. 19 appearance on CNBC.

Write to Ryan Tracy at [email protected] and Brent Kendall at [email protected]