FTC's Lina Khan could greenlight Activision merger to avoid split vote fallout

The FTC could greenlight the $68.7 billion Microsoft-Activision merger in order to avoid a tie vote, sources tell The New York Post.

2

FTC Chairperson Lina Khan could give her blessing to the Microsoft-Activision merger in order to avoid potential fallout from a split vote. The FTC currently has four members of its panel that are scrutinizing the merger including three Democrats (Lena Khan, Rebecca Slaughter, and Alvaro Bedoya) and one Republican (Christine Wilson).

Sources say that Wilson and Slaughter may vote to approve the merger, with Khan and Bedoya moving to block it, leading to a split tie vote. Sources say this could undermine Lina Khan's authority over the regulator and she would instead proceed to approve the merger.

"Lina would probably not put things in a position for that to take place, so instead of having that vote she would make the motion to approve the settlement,"former FTC Chairman William Kovacic told the New York Post.

Previous reports indicated that the FTC was preparing to block the deal with a potential lawsuit.

Microsoft has a significant offer as a pre-emptive strike against oppositions from Sony Corp., who has been the most vocal in their disapproval of the deal. Sony claims that Microsoft would have too much market power across the subscription market thanks to the $31 billion Call of Duty franchise, and Xbox would become a one-stop shop for first-person shooters if it were able to attain Activision's franchises.

As a remedy, Microsoft has offered Sony a 10-year licensing agreement to keep Activision-Blizzard games on PlayStation, namely the lucrative Call of Duty franchise--which Microsoft is expected to significantly disrupt by way of its Xbox Game Pass strategy.