Some people say taxes are the price we pay to live in a civilized society. In reality, taxes are the price we pay for things like the Federal Trade Commission’s (FTC) latest lawsuit against Microsoft—a lawsuit that is boiling down to the popularity of the Call of Duty video game. Yes, really.
If you haven’t been paying close attention to the FTC, you’re forgiven. It can be a bit of a snoozefest until you really understand what they’re up to. But the basics are as follows. Biden nominated a woman named Lina Khan to run the agency, and she hates capitalism. Like really hates it.
It’s important to know that because the FTC allegedly exists to “protect” capitalism. Having a government agency “protect” the free market is like having a fox protect the henhouse—no one else is trying to harm it in the first place. But, you will still have any number of people tell you that is the mission of the agency with a straight face.
Khan has been gunning to rev up antitrust policy in the US since taking over, and her latest lawsuit against Microsoft is the most recent attempt. (As I explained in this primer, antitrust, where the government “breaks up” businesses, is an inherently anti-capitalist policy in and of itself).
The FTC case against Microsoft is pitiful. "It’s trolling on a multimillion-dollar govt budget, and while it’s beneath the dignity of an institution dedicated to a level playing field for businesses and consumers alike, it's on brand for Lina Khan."https://t.co/NHxEpKMjQM
— Stephen Kent (@Stephen_Kent89) June 28, 2023
In the case of FTC v. Microsoft & Activision Blizzard, the FTC is arguing that Microsoft should not be able to acquire Activision-Blizzard because it would reduce competition in the cloud-based gaming industry. Activision’s top game is Call of Duty, which they license and make available on all gaming platforms, not just their own popular console, Xbox.
But for whatever reason, Khan and her team seem to be specifically concerned with Sony’s access to the game. As Stephen Kent of the Consumer Choice Center recently wrote for The Hill, “Microsoft has offered a number of long-term licensing deals during this process to display good faith and disinterest in cutting off Sony from its major titles. It’s bad business for both parties. At the outset of the hearings, it was revealed via internal emails from within Sony, the unquestioned global leader in video game consoles and chief advocate of the FTC’s crusade, that they didn’t really care much at all about Call of Duty. In the words of Sony CEO Jim Ryan about Microsoft-Activision, ‘I don’t want a new Call of Duty deal. I just want to block your merger.’”
So the FTC is basically just going to bat for Sony and doing their bidding on the taxpayers’ dime? That’s how it appears.
This is really how antitrust almost always works. It’s the same old game with the government picking winners and losers, and at the end of the day, it’s merely a trojan horse for the government to seize more control of private businesses and the free market (again, NOT capitalist).
Capitalism invites competition. When a product succeeds it becomes a mark for innovators to surpass, develop cheaper alternatives to, or recreate. We don’t need the government to make that happen. And it should insult everyone that the FTC is currently wasting our taxpayer dollars debating the uniqueness and availability of a stupid video game.
But don’t expect this to be the last of the foolishness, not by a long shot. The FTC is also gearing up to go after Amazon for the high crime of the company leveraging “its power to reward online merchants that use its logistics services and punish those who don’t.” You got that right. Amazon is in trouble for rewarding merchants who use its services. How dare they?
The FTC is expected to file an antitrust case against Amazon in the coming weeks that will focus on the e-commerce giant's online marketplace https://t.co/Skvm9X6vqV
— Bloomberg (@business) June 29, 2023
A conservative-backed legal precedent known as the consumer welfare standard has held back this kind of government corruption for decades. It dictates that in matters of antitrust, judges must only rule against a company if it is actually a monopoly (rare), and it has used that monopoly power in a way that harms consumers.
Since these conditions are almost never met (because this is all a sham), the government’s ability to weaponize antitrust against the market has been limited. And that’s why so many are gunning to get rid of it, including Democrats like Amy Klobuchar, Republicans like Josh Hawley, and especially Lina Khan.
And that’s because this isn’t about competition. It certainly isn’t about what’s best for consumers as the targets of these initiatives are fan favorites with the masses who continue to vote with their dollars and support their offerings. This is about control.
Disclaimer: Hannah is a Consultant for Netchoice, which works on these issues.