"Too-Big-to-Care": Former FTC Chair Calls Out Microsoft After Game Pass Price Hike

Microsoft’s latest round of layoffs and Game Pass price hikes has reignited criticism from former Federal Trade Commission (FTC) chair Lina Khan, who says the company’s post-merger behavior is exactly what regulators warned about during the Activision Blizzard acquisition fight.

Former Federal Trade Commission (FTC) chair Lina Khan

Khan, who led the FTC when it sued to block Microsoft’s $70 billion purchase of Activision Blizzard, took to X this week to argue that the fallout since the deal closed in 2023 has harmed both gamers and developers.

"Microsoft’s acquisition of Activision has been followed by significant price hikes and layoffs, harming both gamers and developers," she wrote. "As we’ve seen across sectors, increasing market consolidation and increasing prices often go hand-in-hand."

Her post also warned that as dominant firms grow “too-big-to-care,” they often raise prices and reduce quality without fear of consequences.

The FTC filed a case against Microsoft in July 2022 but withdrew it in May 2025, long after the deal had already closed in October 2023. According to the FTC’s original lawsuit, the merger was "reasonably likely to substantially lessen competition and/or tend to create a monopoly" in both established and emerging gaming markets.

Microsoft and Activision, of course, pushed back. Then-CEO Bobby Kotick claimed in July 2023 that the merger would "benefit consumers and workers" and "enable competition rather than allow entrenched market leaders to continue to dominate our rapidly growing industry."

But the reality since then has been far less optimistic. Just months after the acquisition, Microsoft cut 1,900 jobs across Activision Blizzard and Xbox. By September 2024, another 650 employees were laid off. The biggest blow came in July 2025, when Microsoft announced 9,000 more job cuts, shuttered The Initiative studio, and cancelled multiple projects. Despite all these, Xbox boss Phil Spencer insisted the company’s gaming division "never looked stronger."

Meanwhile, Game Pass subscribers have been hit with back-to-back price increases. The latest hike pushed Game Pass Ultimate to $30 a month, marking the second increase since the Activision deal closed. The FTC had already criticized the smaller 2024 hike, calling it a sign of post-merger market power. Players online have been quick to resurface Microsoft’s old promises to regulators, where the company insisted Game Pass prices “will not increase as a result of the Merger.” The UK’s Competition and Markets Authority also raised similar concerns during its own review.

With Game Pass generating $5 billion annually even before the price hikes, it's hard to argue that these increases were solely about sustainability.

Khan no longer leads the FTC. She was replaced by Andrew N. Ferguson, who was appointed by President Donald Trump in January 2025.