The news: By failing to block Microsoft’s Activision Blizzard acquisition, the Federal Trade Commission (FTC) is facing the biggest in a series of defeats that are undermining ambitions to regulate Big Tech and raising questions about the effectiveness of its approach.

How we got here: The FTC filed to stop Microsoft from buying Activision Blizzard late last year, saying the $68.7 billion blockbuster deal would suppress competition in the video game market.

• The push to block the acquisition was seen as a bold and risky maneuver for the regulator after a year of anemic regulatory activity.
• Judge Jacqueline Scott Corley rejected the FTC’s request for a preliminary injunction to prevent Microsoft from completing its acquisition.
• The deal still needs to pass regulation by the UK’s Competition and Markets Authority (CMA).
• While the FTC has appealed the ruling, the setback calls into question the regulator’s recent string of failures, including its inability to block Meta’s purchase of rival VR company Within.

Zooming out: Khan maintains that such regulatory losses can still help signal the need for updated antitrust laws in the digital age. 

• However, these strategies have not been met with universal approval, with some arguing that her approach to altering antitrust laws is imprudent and could render future tech regulation ineffective.
• House Republicans are slated to examine what the judiciary panel’s website says is Khan’s “mismanagement of the FTC and its disregard for ethics and congressional oversight.”

Our take: The Biden administration’s ambitious plan to facilitate a sweeping crackdown on Big Tech companies—with the triumvirate of Khan, antitrust lawyer Jonathan Kanter as the DOJ’s antitrust chief, and activist Tim Wu as White House assistant—seems to be unraveling.

Wu departed the White House in December to resume teaching in Columbia Law School, and Kanter, a noted Google critic, was only cleared to work on US antitrust matters in January.

Possible solution: Pursuing smaller and more manageable M&As and monopolies could restore regulatory momentum for agencies that may be stretched thin against tech behemoths and their lobbyists.