The reports of a potential FTC lawsuit add to a growing list of troubling signals about the proposed purchase from various international governments. Earlier this month, the European Commission said it was moving on to an "in-depth investigation" of the deal. In the UK, a similar "Phase 2" investigation by the country's Competition and Markets Authority has scheduled hearing for next month.
Those international investigations
are expected to wrap up in March, ensuring the proposed deal won't close before then and giving the FTC some time before it would have to file suit. Any such lawsuit would need to be approved by a majority of the four current FTC commissioners and would likely start in
the FTC's administrative court. And whatever the outcome, legal maneuvering in the case could easily delay the planned merger past a July 2023 contractual deadline, at which point both companies would have to renegotiate or abandon the deal.
An FTC lawsuit in this matter would also be a the strongest sign yet of a robust antitrust enforcement regime under FTC chair Lina Kahn, a big tech skeptic who was
named to the post in June. Back in July, Kahn
announced an antitrust lawsuit against Meta (formerly Facebook) and its
proposed $400 million purchase of Within, makers of VR fitness app
Supernatural.
Three months after Microsoft's proposed purchase was announced in January, a group of four US Senators
wrote an open letter strongly urging the FTC to take a close look at the deal. Last month, merger news site Dealreporter
said FTC staff had expressed "significant concerns" about the deal. And this week, the New York Times cited "two people" in
reporting that the FTC had reached out to other companies for sworn statements laying out their concerns about the deal, a possible sign of lawsuit preparations.
