The Biden administration wants to arm its antitrust enforcements with stricter rules to clamp down on Big Tech mergers, but the tough talk didn’t faze tech companies that are in the midst of an acquisition frenzy.
The Federal Trade Commission and Department of Justice said Tuesday that they planned to tighten merger rules with the digital economy in mind and were seeking public feedback about the effort.
Big Tech’s biggest names paid little attention, however, as Microsoft announced a new acquisition valued at $68.7 billion hours before the Biden administration’s scheduled unveiling of its new antitrust moves.
FTC Chair Lina Khan said the administration’s credibility on antitrust policy will depend upon its revision of the rules for modern times.
“The durability and public legitimacy of our antitrust regime depend on the ability of enforcers and courts to adapt, remaining faithful to these legislative mandates even as markets and business practices shift and evolve,” Ms. Khan said on a Zoom call with reporters. “Just as we must revise our theories and models to fit new facts and evidence, we must ensure that our merger guidelines accurately reflect the realities of the modern economy.”
Ms. Khan’s team hopes to build on the momentum from a procedural victory in federal court in its ongoing legal battle with Facebook. Last week, a federal judge allowed the FTC’s case over Facebook’s monopoly power to proceed. The same judge previously scrapped an earlier version of the lawsuit.
Talk of new merger rules is not enough to stop big tech companies from growing through with acquisitions. Microsoft said Tuesday it plans to acquire Activision Blizzard, a game developer, in a deal that Microsoft said would make it the world’s third-largest gaming company by revenue, behind Tencent and Sony.
The deal is valued at $68.7 billion and is expected to close in the fiscal year 2023. Activision Blizzard has 10,000 employees around the world, according to the company.
Microsoft is far from the only company absorbing smaller colleagues. The FTC and the Justice Department in 2021 received more than double the average number of merger filings for the previous five years, said Ms. Khan.
Jonathan Kanter, the assistant attorney general of the Justice Department’s antitrust division, said Americans are living through economic changes that rival the industrial revolution.
“Companies today cooperate, compete, invest and invent in profoundly different ways than they did 20 years ago, let alone 50 or 75 years ago,” Mr. Kanter said on the Zoom call. “Times have changed because the advent of the digital economy has absolutely transformed our economy. The digital revolution has not only impacted new markets like tech but markets across our economy, many of which have been rebuilt from the inside out.”
Both Ms. Khan and Mr. Kanter declined to answer questions from reporters. According to FTC, the administration wants public input on a slew of aspects about its merger rules including regarding, “how to account for key areas of the modern economy like digital markets,” and whether to adjust the threshold for determining that certain transactions are presumed to be anticompetitive.
While the Biden administration is not waiting for Congress to act before reviewing the rules, it has Democratic allies pursuing legislative changes. Sen. Amy Klobuchar, Minnesota Democrat, previously pinpointed January as the time for the Senate to move forward with antitrust legislation.
• Ryan Lovelace can be reached at rlovelace@washingtontimes.com.
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