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The week in business: a big bet on games

Microsoft on Monday announced plans to buy video game company Activision Blizzard for nearly $70 billion, its biggest deal ever. The company said the acquisition would help it compete in the so-called Metaverse, the nascent virtual world where some technologists believe we’ll soon be living a second life. But Microsoft’s most immediate goal is probably to bolster its gaming platform. Just as Netflix acquires content to compete for streaming viewership and subscription fees, Microsoft’s purchase of Activision – the maker of popular games like Call of Duty and Candy Crush — could bolster the game library for Xbox Game Pass, Microsoft’s $10. Netflix-style video game subscription service. The size of the deal and the possibility that Microsoft could make some popular Activision titles exclusive to its platform could result in renewed antitrust scrutiny from federal regulators.

Airlines warned earlier this week that a major expansion of fifth-generation cellular service scheduled for Wednesday could disrupt flights. Unlike previous generations of wireless services, 5G technology uses radio frequencies similar to those used by the devices pilots rely on to determine a jet’s altitude, and for years experts have said it could interfere with this equipment. Flight cancellations and chaos were finally averted thanks to a last-minute decision by AT&T and Verizon to restrict 5G service near airports. President Biden said federal officials would continue to work with wireless companies, airlines and aircraft manufacturers to find a “permanent and workable solution.”

Intel plans to build a $20 billion chip manufacturing complex in Ohio, a move that has geopolitical and supply chain implications. During the pandemic, manufacturing disruptions and labor shortages caused a shortage of chips, which are mostly made in Taiwan. Legislation passed in the Senate last year would provide $52 billion in subsidies to the chip industry to help the United States compete with China on innovation by expanding its stake in a fundamental technology. Intel plans to begin construction in Ohio later this year and begin producing chips there by 2025. Intel Chief Executive Patrick Gelsinger said Intel could invest up to $100 billion over a decade at its next manufacturing campus in the United States, with the speed and scope of expansion dependent in part on the availability of federal grants.

Some public health experts hope that as the Omicron wave of the coronavirus recedes, the pandemic may become more manageable. What that would mean for the precautions companies take to keep their workplaces safe remains unclear and policies have continued to evolve. In a survey of Manhattan businesses employing 215,000 white-collar workers, nearly a quarter said they didn’t know when their offices would reach half capacity. Companies in the hospitality industry say they are struggling to decide when workers who test positive for the virus can return to work. And after the Supreme Court struck down President Biden’s mandate forcing large employers to demand vaccines or testing, Starbucks abandoned a plan to impose those demands on its 200,000 workers.

President Biden and other leading Democrats have said reining in Big Tech is a priority, but lawmakers are running out of time before the midterm elections, when Democrats could lose control of Congress. Over the next few months, they plan to push a handful of proposed laws that reduce the power of companies like Amazon, Alphabet and Meta. On Thursday, a Senate committee voted to advance such a bill that would ban tech platforms from promoting their own products over those of others. Other legislation aims to strengthen privacy, make it easier to take down big tech giants, fight misinformation, and regulate artificial intelligence and cryptocurrencies. Most have a long chance of passing: Although lawmakers on both sides of the aisle mostly agree that Congress should do something to increase competition in the tech industry, they have different ideas about how to go about.

Fed officials will meet for the first time this year from Tuesday, and at the top of the agenda will be the fight against inflation. Fed Chairman Jerome H. Powell said this month that the economy no longer needed as much help and with prices continuing to climb at a record pace, economists expect that it is raising interest rates three or four times this year. The Fed also began ending its bond-buying program, which it used to fuel growth during the pandemic. Among other economic news to be watched closely this week: The government will announce growth in the US economy in the fourth quarter on Thursday.

Sales of electric cars have overtaken diesel in Europe for the first time. Shares of Netflix and Peloton, two pandemic winners, fell. Amazon has released a name for its long-awaited “Lord of the Rings” series. (It’s “The Rings of Power”). And quitting smoking is contagious.