The FTC’s Loss in the Microsoft-Activision Case

Plus, Israel's democratic backsliding, how the Fed uses forward guidance, and the Biden administration's student loan actions.

View in browser July 29, 2023   Editor's note: Thank you for reading the Brookings Brief! You'll notice that this edition looks a little different from our usual format. We're testing out new ways to share our research and analysis, and we'd love to hear your feedback. Does tech need a regulatory antitrust alternative after the Microsoft-Activision decision?   If you're into gaming, you may have watched the legal developments around the Microsoft-Activision merger with interest. The Federal Trade Commission (FTC) argued against the move on antitrust grounds, but Judge Jacqueline Scott Corley ruled that the FTC was unable to prove that Microsoft would have a real incentive to withhold Call of Duty—an enormously popular game and product of Activision—from other platforms after the merger. And so, the merger would not be likely to substantially lessen competition in different video game markets, according to Judge Corley.     For the foreseeable future, cases attacking vertical mergers like the one between Microsoft and Activision face an uphill battle in the courts because of the high burden of proof required on the part of government agencies. But common sense, the traditional antitrust view, current scholarship, and recent antitrust agency actions concur that government must control these arrangements if markets are to remain open and competitive. In his latest commentary, Mark MacCarthy discusses the decision by Judge Corley, the FTC's aggressiveness on antitrust, and what needs to happen next.  Read more More research and commentary   The long path forward for student loan forgiveness. Katherine Meyer explains what the Biden administration is trying to do now that the Supreme Court has struck down the president's loan forgiveness plan.    What is forward guidance? The Federal Reserve's primary tool for steering the economy is raising or lowering short-term interest rates. In recent years, however, the Fed and other central banks have embraced other tools, among them "forward guidance." James Lee, Sam Boocker, and David Wessel detail how it works.  Israel's democratic backsliding    On Monday, Israel's Knesset passed a bill that strips the country's Supreme Court of the power to declare government decisions unreasonable. The move, part of Benjamin Netanyahu's proposed judicial overhaul, sparked widespread protests in Israel and condemnation globally.   Natan Sachs provides helpful background info on what the legislation does, what this means for Israeli politics and society, and how the United States should view these developments. The Brookings Institution,1775 Massachusetts Ave NW, Washington, DC 20036 Unsubscribe | Manage newsletter subscriptions  The conclusions and recommendations of any Brookings publication are solely those of its author(s), and do not reflect the views of the Institution, its management, or its other scholars.