Former U.S. Federal Trade Commission (FTC) Chair Lina Khan has renewed her criticism of Microsoft following a new round of layoffs and price hikes, arguing that the company’s post-merger actions validate the FTC’s earlier antitrust concerns.
In a post on X (formerly Twitter), Khan pointed to Microsoft’s decisions since acquiring Activision Blizzard in 2023 as proof of what the agency warned might happen if the deal went through — fewer jobs, higher prices, and less accountability.
Khan wrote that the merger has been followed by “significant price hikes and layoffs, harming both gamers and developers.” She added that growing corporate consolidation often results in higher costs and reduced competition, as dominant players face less pressure to prioritize consumer interests.
A Long, Bitter Merger Battle
The FTC’s fight against Microsoft’s acquisition of Activision Blizzard, the video game giant behind Call of Duty and World of Warcraft, was one of the most high-profile antitrust cases in recent years.
When Microsoft announced its intent to buy Activision Blizzard for $69 billion in early 2022, the FTC under Khan immediately raised alarms. The agency argued that the deal could reduce competition and give Microsoft too much control over the gaming industry — particularly in both console and cloud gaming markets.
Despite the FTC’s legal challenge, Microsoft closed the deal in October 2023, even as litigation continued. The case remained active until May 2025, when the final proceedings concluded in Microsoft’s favor. By then, the company had already begun integrating Activision Blizzard into its gaming ecosystem.
Layoffs and Game Cancellations Follow the Deal
Microsoft had originally framed the acquisition as a win for both consumers and workers. Then-Activision Blizzard CEO Bobby Kotick publicly stated in 2023 that the merger would create new opportunities and promote fairer competition across the gaming market.
However, the optimism didn’t last long. Within months of the acquisition, Microsoft announced the layoff of 1,900 employees across its Xbox and Activision Blizzard divisions. Soon after, a highly anticipated survival game that had been in development for years was scrapped.
Further cuts followed. In September 2024, Microsoft let go of another 650 employees, and by July 2025, the company revealed plans to eliminate 9,000 additional jobs as part of a broader restructuring effort. The move affected studios across multiple regions, including the closure of The Initiative, a team behind one of Xbox’s most high-profile projects.
These job cuts arrived despite Microsoft reporting strong financial results in its gaming segment. Executives continued to describe the Xbox division as “healthy” and “growing,” even as thousands of employees lost their jobs.
Subscription Price Hikes Add to Consumer Backlash
In addition to job cuts, Microsoft has faced criticism for raising prices on its gaming subscriptions. This week, the company confirmed a new price increase for Game Pass Ultimate and PC Game Pass, the second such hike since the Activision Blizzard deal closed.
The FTC had already taken issue with the first price increase in mid-2024, warning that reduced competition could allow Microsoft to raise prices more freely. This latest round of hikes is even steeper and comes at a time when many players feel they are receiving less value for their money amid game cancellations and fewer first-party releases.
Subscribers voiced frustration online, saying the company’s promises of greater accessibility and affordability now ring hollow. The timing of the price hike — coming so soon after mass layoffs — has also drawn criticism from both players and analysts who view it as a signal that the merger’s promised benefits have failed to materialize.
Khan’s Remarks Resonate Despite Her Departure from FTC
Although Lina Khan stepped down as FTC chair in January 2025 following President Donald Trump’s inauguration, her recent comments quickly gained traction online. Many observers saw her statement as a vindication of the FTC’s initial skepticism toward the Microsoft-Activision deal.
During her tenure, Khan built a reputation for challenging Big Tech over monopolistic practices, leading efforts to scrutinize mergers involving Amazon, Meta, and Google. The Microsoft case, while ultimately unsuccessful in blocking the merger, became a symbol of the FTC’s willingness to confront corporate power.
Her latest remarks, while lacking regulatory weight, underscore ongoing concerns about how major tech mergers reshape industries and affect workers and consumers alike.
Microsoft Defends Its Strategy
Microsoft has not publicly responded to Khan’s comments, but company executives have repeatedly argued that the Activision Blizzard acquisition has helped expand opportunities in gaming. They’ve pointed to investments in cloud gaming, partnerships with smaller studios, and efforts to bring more titles to multiple platforms as evidence that the deal benefits the broader ecosystem.
Still, critics argue that Microsoft’s growing dominance — alongside competitors like Sony and Nintendo — highlights the dangers of market consolidation. The pattern of job cuts, price increases, and studio closures, they say, demonstrates that large-scale mergers often prioritize shareholder interests over those of consumers or employees.
