June 16, 2022

FTC Chair Lina Khan, Responding to Sen. Warren’s Letter on Microsoft’s Proposed Acquisition of Activision Blizzard, “Redoubles” FTC’s Commitment to Scrutinize Mergers’ Impacts on Workers

Text of Letter to FTC (pdf) | FTC Response (pdf)

Washington, D.C. - Today, United States Senator Elizabeth Warren (D-Mass.) released Federal Trade Commission (FTC) Chair Lina Khan’s response to a March 2022 letter the Senator and her colleagues sent regarding the proposed Microsoft-Activision transaction and its possible anticompetitive effects on workers. The letter followed Microsoft’s announcement of its proposed $68.7 billion acquisition of Activision Blizzard, a gaming company facing internal blowback after years of an unchecked culture of sexual misconduct and discrimination. 

“For far too long, giant corporations have had almost free rein over our economy, harming competition, consumers, and workers. I appreciate Chair Khan’s commitment to closely scrutinize anti-competitive mergers and their impact on workers, including Microsoft’s proposed acquisition of Activision,” said Senator Warren.

In her response, FTC Chair Khan committed to closely scrutinize monopsony issues and labor concerns during the review process of all mergers. She also indicated that the FTC is looking into whether anti-worker employment provisions like non-compete clauses and non-disclosure agreements violate the FTC Act. 

“I share your concern that monopsony power in labor markets may enable firms to harm workers in a host of ways, including through undermining their rights and dignity. Although antitrust law in recent decades generally has neglected monopsony concerns and harms to workers, I strongly believe that merger investigations must scrutinize the impact on labor markets. Given that Activision disclosed in a March 21, 2022 securities filing that the FTC is conducting a review of the proposed transaction, I am able to confirm that the FTC is investigating the proposed merger,” wrote Chair Khan in the letter.

“The FTC and the Department of Justice are redoubling our commitment to ensuring we consider how unlawful mergers and conduct may harm workers. The agencies recently hosted a joint workshop focused on competition and labor markets, and our current joint public inquiry to consider revisions to the merger guidelines includes a request for public comments to inform how to better address a merger’s potential labor market effects. Additionally, the FTC is scrutinizing whether certain contractual provisions — including non-compete clauses and nondisclosure agreements—may constitute unfair methods of competition, and how unfair or deceptive practices may also harm workers,” continued Chair Khan.

Senator Warren has been urging the Biden Administration to closely evaluate potential anti-competitive mergers in several industries across the economy. Recently, Senator Warren introduced the Prohibiting Anticompetitive Mergers Act which would ban deals like the proposed Microsoft-Activision acquisition and would direct the FTC and the Department of Justice (DOJ) to assess possible harms to workers when reviewing any merger. In the past year, Senator Warren has sent letters to the FTC and the DOJ about the proposed mergers of Sanderson-Wayne, WarnerMedia-Discovery, Spirit-Frontier, and Amazon-MGM