FTC May Save Take-Two From Getting Acquired by EA
According to Justin Blankenship, An ex-FTC Lawyer, EA and Take-Two merger could be stopped by FTC due to anti-trust laws. Blankenship sent a formal post to Newsweek, here’s a snippet:
Until 2004, I worked in a division of the FTC that spent a lot of time looking at technology-related mergers, and had at least taken a good look at mergers like this one. I also have every reason to suspect that my former colleagues would give this deal a hard look, especially in light of Mr. Pachter’s comments, of which I’m sure they’re aware.
If a government agency has problems with a merger, it’s likely because it believes the economic data supports a narrowly defined market (e.g., licensed professional hockey videogames or hockey videogames). The parties to the merger will argue to define the market more broadly (e.g., videogames as a whole, or sports videogames as a whole). Under a broad market definition of all videogames, the merger poses no problems, because the loss of one product in a market of thousands of competitors is a ripple in the sea. However, under a narrow market definition, no other third party can make a licensed professional hockey game (with real player names, team names, stats, etc.) other than EA/Take-Two, granting it an effective monopoly.
Read-up the full post here.
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