Facing allegations that this acquisition would allow Microsoft to suppress competition in the industry and monopolize popular game titles, FTI Consulting subsidiary Compass Lexecon provided the economic analysis and expert testimony for the landmark merger case.
Microsoft's $75.4 billion acquisition of Activision Blizzard was approved by regulators and was completed in October 2023 following regulatory approval. After the US Court of Appeals for the Ninth Circuit affirmed the decision in May 2025, the FTC determined the public interest was best served by dismissing the complaint against Microsoft.
Professor Dennis W.Carlton of Compass Lexecon testified that the FTC expert’s economic analysis was flawed, relied on unsupported assumptions and did not provide a reliable basis on which one could conclude that the merger would lead to foreclosure of Activision Blizzard content from Microsoft’s rivals.
Professor Carlton also testified that the merger would lead to merger-specific benefits including that Activision Blizzard’s gaming content would be distributed more widely post-merger than would be the case in the absence of the merger.
Judge Corley ruled that the FTC had failed to demonstrate that it would likely prevail in its claim that the proposed merger would substantially lessen competition, and that, in contrast to the FTC’s claims, there would be more consumer access to Activision Blizzard content following the merger.
Judge Corley repeatedly referenced Compass Lexecon’s testimony and analysis when criticizing the FTC expert’s analysis.
Compass Lexecon was retained by Microsoft and Activision Blizzard to provide economic analysis and expert testimony on the proposed merger’s impact on competition and procompetitive efficiencies in the gaming industry.
Compass Lexecon expert Professor Carlton testified before the federal court that the FTC’s economic analysis was flawed, relied on unsupported assumptions and failed to show that the transaction would lead to unfair competition and the foreclosure of Activision Blizzard’s content from Microsoft’s rivals.
The testimony identified deal-specific benefits, including expanded access to Activision Blizzard’s gaming content, lower costs for gamers and increased incentives for investment in game development.
Judge Corley’s opinion relied on several recent challenges to vertical mergers in which judges ruled for the defendants,1 all of which are cases in which Professor Carlton served as an economic expert for the merging parties.
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