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Microsoft Wins Appeal Against FTC Challenge to $69 Billion Activision Deal

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Microsoft has secured a major legal victory as the 9th U.S. Circuit Court of Appeals rejected the Federal Trade Commission’s (FTC) bid to revive its antitrust challenge against the tech giant’s $69 billion acquisition of Activision Blizzard, maker of the Call of Duty franchise.

Key Points:

  • Unanimous Ruling: A three-judge panel upheld a lower court decision that denied the FTC’s request for a preliminary injunction. The court found that the FTC failed to demonstrate that the deal would likely harm competition.

  • Deal Closed in 2023: Microsoft finalized the largest-ever gaming acquisition after gaining approvals from regulators including UK authorities, despite scrutiny in multiple global jurisdictions.

  • FTC’s Position: The FTC argued the acquisition would undermine competition in console gaming, subscription services, and cloud gaming, but both the district court and appeals court found these claims lacked sufficient evidence.

  • Impact on FTC Strategy: The ruling is a blow to the FTC’s broader push under President Joe Biden’s administration to ramp up antitrust enforcement in Big Tech. The FTC’s internal administrative proceedings, paused since 2023, remain uncertain.

  • Microsoft’s Next Steps: While Microsoft has not yet commented, the ruling removes a significant legal obstacle and further solidifies its control over Activision’s gaming titles and intellectual property.

Judge Jacqueline Scott Corley had already ruled in 2023 that the acquisition would not “substantially lessen competition,” a standard the appellate court agreed had been correctly applied.

FTC Files Lawsuit Against Uber Over Alleged ‘Deceptive’ Subscription Enrollments

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Uber Technologies is facing a lawsuit filed by the U.S. Federal Trade Commission (FTC), accusing the company of engaging in “deceptive billing and cancellation practices” with its Uber One subscription service. According to the FTC, Uber misled consumers into signing up for its premium service without their consent and made it unreasonably difficult for them to cancel. The commission claims that users were subjected to a complex and burdensome process when attempting to cancel, requiring them to navigate as many as 23 screens and complete up to 32 actions to end their subscriptions.

In its complaint, filed on Monday, the FTC alleges that Uber charged consumers for Uber One without their explicit approval, and that the company misrepresented the savings and benefits associated with the program. The regulatory body’s investigation into these practices has intensified concerns over the clarity and transparency of subscription-based services, with Uber now facing scrutiny over its business model. This legal battle comes on the heels of a broader push by the FTC to crack down on subscription traps that make it difficult for consumers to cancel services they no longer want.

Following the announcement of the lawsuit, Uber’s stock saw a significant decline, dropping as much as 5.3 percent in New York, signaling investor concern over the potential consequences of the legal action. As of 2:15 p.m. on the same day, Uber’s shares were down 4.5 percent to $71.84. In response to the FTC’s claims, Uber has denied the allegations, asserting that it does not sign up or charge users without their consent. The company maintains that the cancellation process for Uber One now takes most users only 20 seconds or less, calling the FTC’s actions misguided.

The lawsuit is part of the FTC’s ongoing effort to protect consumers from deceptive business practices, particularly in the subscription sector. Recently, the agency has filed similar cases against major companies, including Amazon and Adobe, for allegedly making it overly complicated for consumers to cancel unwanted subscriptions. As the case moves forward, Uber remains confident that the court will find its sign-up and cancellation processes to be clear, simple, and in compliance with the law.

Meta’s Mark Zuckerberg Considered Instagram Spinoff Amid Ongoing Antitrust Scrutiny, Documents Reveal

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In 2018, Meta CEO Mark Zuckerberg seriously considered spinning off Instagram, fearing increasing antitrust scrutiny, according to a document presented during a trial in Washington. The document was revealed on the second day of Zuckerberg’s testimony in a high-profile case where the U.S. Federal Trade Commission (FTC) is attempting to reverse Meta’s acquisitions of Instagram and WhatsApp. This legal battle aims to undo the mergers, which the FTC claims reduced competition in the social media market.

The memo, shown during the trial, revealed Zuckerberg’s candid thoughts on the matter. In it, he mused, “I wonder if we should consider the extreme step of spinning Instagram out as a separate company.” At the time, Meta was contemplating a major reorganization, aiming to better integrate its social media platforms. However, Zuckerberg also acknowledged that consolidating the apps could foster “strong business growth,” even though it could risk undermining Facebook’s flagship app and its broader family of services.

Despite these concerns, Meta ultimately decided against spinning off Instagram, choosing instead to push forward with its integration plans the following year. The decision not to break off Instagram underscores Zuckerberg’s assessment of the antitrust risks at play. The document reflects his awareness of the potential legal and regulatory challenges Meta might face, with antitrust pressure mounting in the tech industry.

Zuckerberg’s memo also highlighted a broader concern about the future of big tech. He expressed that, with rising calls to dismantle large tech corporations, it was likely that Meta could face forced separations in the future. Specifically, he noted that a shift in U.S. leadership, particularly under a “next Democratic president,” could lead to actions to break up major tech companies, including Meta’s prized acquisitions like Instagram and WhatsApp.