The endless saga of the legal battle between the FTC and Microsoft for the acquisition of Activision Blizzard continues, with the house of Xbox countering one of the regulator's latest moves and the Judge opting to take more time to rule on it.
Microsoft's counsel filed a motion opposing the FTC's attempt to exclude evidence and testimonies on the alleged procompetitive effect of the agreements with Ubisoft, Sony, Nintendo, Nvidia, Boosteroid, Cloudware, and Ubitus.
The company argues that the FTC's motion "makes no sense" as these agreements are procompetitive by their very nature, as they expand access to Activision's games. They also directly address the FTC's sole theory of harm, which is that Microsoft would withhold Activision content from competitors.
According to Microsoft, the FTC's motion also contradicts its own arguments before the Ninth Circuit Court of Appeals, which alleged that the administrative proceeding is the proper forum to evaluating the effects of the agreements. Microsoft calls the FTC's attempt "Kafka-esque" and argues that it would cause the court to "spend time evaluating a version of the transaction that bears little resemblance to reality."
Moreover, the company argues that the FTC' argument that Microsoft could bring forth the procompetitive benefits of these agreements only if it did economic modeling of them "has zero basis in law."
On top of that, the FTC's motion argues that some of the agreements aren't related to the United States, so they're irrelevant to the case, but Microsoft argues that this has already been rejected by the District Court as, for example, Boosteroid has servers in Pennsylvania, North Carolina, Texas, Illinois, Florida, and Washington.
Moreover, that the relevant geographic market is just the United States is the FTC's own allegation, which will be a disputed issue at the trial.
While the court's ruling on this matter would either grant or deny Microsoft some very relevant weapons on its line of defense, the Judge isn't ready to take a decision. Another order mentions that the date of the hearing has not been set (it'll happen 21 days after the Ninth Circuit's ruling on the FTC's appeal).
Instead of deciding now about the scope of evidence that would be admitted to a hearing that is "neither imminent nor certain" the judge prefers to defer the ruling to 10 days before the beginning of the evidentiary hearing, should it actually happen.
This is where we are now, and we're likely to hear much more about this issue going forward.
While the acquisition of Activision Blizzard has been closed, the legal battle has been continuing and will likely continue for a while. The FTC seems to be determined to oppose the acquisition and could seek a divestment should it win in court.
Recently, the regulator attempted to bring Microsoft's recent wave of layoffs into the picture in front of the Ninth Circuit Court of Appeals, and the counsel of the house of Xbox fired back with its own letter.
If this is confusing for you (quite understandably), two proceedings are going on in parallel. The FTC has appealed the District Court's decision in Microsoft's favor in front of the Ninth Circuit Court of Appeals and is preparing to discuss the case on the merits in front of its Administrative Law court.
While the hearing in front of the Administrative Law court is supposed to happen after the Ninth Circuit Court of Appeals' ruling, The FTC's and Microsoft's counsels are currently engaged in a preliminary battle on which evidence will be admitted at the trial. The documents that surfaced today are related to this second legal battlefield.
Just yesterday, Microsoft announced that it's ready to bring Activision Blizzard's games to Game Pass, starting with Diablo 4 in March.
