The Microsoft-Activision and Meta-Within merger cases are the only ones so far to reach federal judges under Khan, who has been pushed onto the defensive, along with her U.S. Department of Justice Antitrust Division counterpart, to justify Biden-era efforts to transform competition enforcement in the wake of court pushback. The FTC has also suffered losses in its in-house merger cases.
"Clearly, in their home court, they've got a better case," said R. Mark McCareins, a professor at Northwestern University's Kellogg School of Management. But the agency has still lost in that arena, he noted.
Leaders at both agencies have preferred to focus on the deals they've gotten parties to abandon and the general atmosphere of hesitation in some boardrooms they have helped to foster.
"Even so, how courts treat the agencies in things like merger challenges are really important," said Carrier.
That silver lining, observers say, may be fading as the agencies struggle in litigated cases to push back on corporate consolidation generally and especially the merger strategies of the country's leading online platforms and other technology giants, several of which are separately battling major antitrust conduct cases from state and federal enforcers.
"You can't change doctrine unless you win cases in court," said Kovacic, who noted that for all the FTC's other efforts, the only way to make permanent changes is through court precedent and legislation. "Ultimately, everything else you do is reversible."
Continuing with the Ninth Circuit appeal has much more recent — and potentially more favorable — precedent from the FTC's challenge of Whole Foods Market Inc.'s planned purchase of Wild Oats Markets Inc. There, a district court denied the FTC a preliminary injunction in 2007, but the D.C. Circuit reversed the following year, and Whole Foods ultimately sold the Wild Oats brand and 32 stores.
In Microsoft-Activision, Judge Corley gave the FTC little wiggle room for its appeal, several observers said. The judge's ruling came down heavily on the facts, and appellate courts generally defer to the lower court's factual findings.
"I think that district court decision is fairly bulletproof," said McCareins.
If the FTC does opt to appeal, a key target may be the judge's apparent requirement that a deal will substantially harm competition, rather than the lower standard that the FTC cites in the statute: that a deal simply "may" harm competition.
"The standard may be the thing they're most worried about," said Rissmiller.
