The key distinction lies in the burden on the plaintiff and the court’s responsibility. The FTC points out that in the case of a permanent injunction, federal district courts are responsible for determining the antitrust merits without any separate administrative proceeding. However, for a preliminary injunction, the FTC only needed to raise “serious, substantial” questions regarding the merits of the acquisition.
According to the FTC, the court erred by holding them to the standard applicable to a full trial on the merits of a vertical merger, which was not appropriate for this preliminary proceeding.
Furthermore, the FTC’s filing argues that the court made legal errors in several judgments. These include the potential impact of Xbox Game Pass becoming the sole subscription service with access to Call of Duty, Microsoft’s incentives to fully or partially restrict competitors’ access to content, and the significance of Microsoft’s agreements with competing cloud services.
Regarding the agreements with competing cloud services, the FTC asserts that the court wrongly assumed they were procompetitive and disregarded evidence that they did not address potential harms to competition in the console market.
The FTC also emphasizes the court’s request for a “smoking gun document” and states that it is not necessary to contradict a company’s self-serving statements made during litigation. The FTC claims that it did, in fact, present a smoking gun in the form of Microsoft’s testimony and analysis regarding the revenue shift necessary to offset foreclosing PlayStation. The FTC argues that even considering this evidence raises questions about Microsoft’s intentions, which the court allegedly ignored.
In summary, the FTC is once again attempting to slow down the Activision deal, primarily because it believes that proceeding with the merger would irreparably harm both the FTC and the public interest. Despite only a few days passing since the ruling, legal intricacies are already intensifying, indicating that further proceedings may last days or even weeks.
The UK CMA (Competition and Markets Authority) remains opposed to the merger, posing a significant obstacle to its global closure. However, it has acknowledged that Microsoft and Activision have the option to modify the deal to address the CMA’s concerns.
Austin freelanced for the likes of PC Gamer, Eurogamer, IGN, Sports Illustrated, and more while finishing his journalism degree, and he’s been with GamesRadar+ since 2019. They’ve yet to realize that his position as a staff writer is just a cover up for his career-spanning Destiny column, and he’s kept the ruse going with a focus on news and the occasional feature.
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