Gamers Celebrate Their ‘Loss’ In Court Over Blocking Microsoft’s Activision/Blizzard Acquisition

Legal Issues

from the color-between-the-lines dept

We’ve spilled a great deal of ink thus far on the subject of Microsoft’s proposed purchase of Activision Blizzard. The discussion around this whole thing began with the acquisition itself, before quickly moving into the topic of how Microsoft was going to get past the narrow glares of several regulatory bodies that all made noises about antitrust concerns and hand-wringing over competition within the video game market itself. In the intervening weeks, the placation of the EU regulators by Microsoft’s 10-year deals to keep Call of Duty specifically on multiple platforms seems to have worked, whereas the outcome of the UK’s CMA body and the United States’ FTC are less clear.

But the regulators aren’t the only folks getting in on the action. At the end of last year, a handful of gamers filed a lawsuit against Microsoft seeking to the block the acquisition on antitrust grounds as well. Recently, we saw the initial outcome of that lawsuit: a California judge granted Microsoft’s motion to dismiss the suit on grounds that the plaintiffs did not bring enough specific evidence to the court detailing how they and the market would be harmed by the purchase.

And, yet, the lawyer for the plaintiffs is pleased with the outcome.

The gamers’ lawyer, Joseph Alioto, told Ars that he believes they have ample evidence to satisfy the judge in this case. He confirmed that gamers intend to file their amended complaint as soon as possible. Rather than being discouraged by the judge’s dismissal, Alioto told Ars that the gamers were pleased by Corley’s order.

“We think that the order is terrific, because it actually states exactly what the judge wants,” Alioto told Ars. “We have more than sufficient evidence to respond to her directly and intend to file the amended complaint as soon as possible. Certainly, we believe within the next 10 days or earlier.”

In other words, the judge’s order, which you can read embedded below, sets out for the plaintiffs exactly what the court would be looking for to allow this case to move forward if re-filed. Alioto claims to have the evidence the court wants, which makes me somewhat curious why it wasn’t presented to the court initially, but if he has it, he has it.

Now, the order also did not mince any words when it came to the brevity of evidence of harm and standing presented by the plaintiffs.

In her order, Corley asked gamers for additional evidence to support claims that the merger would potentially foreclose access to games, harm specific gaming industry markets, and perhaps most importantly, harm gamers like them. Her order is peppered with specific questions that gamers now have a chance to answer like, “Why would Microsoft make Call of Duty exclusive to its platforms thus resulting in fewer games sold?” and “What is it about the console market or PC games market and Microsoft’s position in those markets that makes it plausible there is a reasonable probability Microsoft would take such steps?”

In another example, Corley’s order told gamers that “what are missing are allegations that plausibly suggest it is reasonably probable to make economic sense for Microsoft to make the successful Activision gaming franchises exclusive.”

So, here’s the thing: we have asked the exact same questions as the judge. I, too, don’t understand why Microsoft sees it as economically advantageous to limit the platforms on which the titles produced by a studio it now owns can be sold. I think it’s a terrible business decision if Microsoft goes that route. I also anticipate that Microsoft will present the same signed and proposed 10-year deals to keep CoD multi-platform as it has presented to regulators should this case be brought once more.

But if it’s evidence that Microsoft is interested in taking titles exclusive that the court wants, Alioto can certainly find it. Hell, he can find it within Techdirt’s own pages, should he take a look. And there will be more posts he can draw on in the near future.

Whether that will make these gamers’ lawsuit any more successful the next time around remains to be seen. These sorts of citizen-led attempts to block major business acquisitions that also have the attention of regulators rarely work, after all.

Filed Under: acquisitions, antitrust, call of duty, mergers
Companies: activision blizzard, microsoft