The very first court action related to the proposed $69B USD acquisition of Activision Blizzard occurred with little fanfare or evidentiary bombshells. Tuesday’s pre-trial arguments (conducted via a conference call) were brief—well under 10 minutes of conversation, all told—as Microsoft attorney Beth Wilkinson (founder of the Washington D.C-based firm Wilkinson Stekloff) and Federal Trade Commission (FTC) attorney James Weingarten briefly interacted with FTC Chief Administrative Law Judge D. Michael Chappell on a couple of points. The hearing was short mostly because it was simply a “scheduling call” and not an evidentiary hearing.
The hearing is the result of the FTC filing a lawsuit asking a judge to block the transaction in December, claiming that it would give Microsoft exclusive access to Activision’s biggest titles (most notably Call of Duty) and freeze out competitors such as Sony’s PlayStation and Nintendo’s Switch. Microsoft has already inked a 10-year deal with Nintendo to ensure that the popular shooter will be available on current and future consoles from the company. It signed a similar deal in December with the world’s largest PC games portal, Steam.
One of the interesting tidbits to come out of Tuesday’s hearings was from Weingarten, who said that the door is open for Microsoft to propose remedies to the agency to move the deal forward, but that the FTC is not currently engaged with Microsoft/Activision Blizzard at this time. When asked who the “staff” is who are available to interact, Weingarten said, “Me your honor.”
Wilkinson said that Microsoft is waiting on other jurisdictions that are reviewing the deal such as the UK’s Competition & Markets Authority and the EU’s European Commission, and that remedies agreed to in those jurisdictions will likely be offered to the FTC at a later time. Most of these actions should (in theory) be settled by Mid-April (CMA will make a ruling at the beginning of March) and The European Commission sometime between now (according to some reports) and April 11.
The big deadline for this deal is July 18, Wilkinson told the court, but added that Microsoft is ready to move forward to an inhouse FTC trial or in a district court if it has to. That date is important (and part of the reason Microsoft claims that the FTC was violating its Fifth Amendment right to due process) because if the deal isn’t finalized by July 18, Microsoft will have to terminate it and pay Activision Blizzard a breakup fee of up to $3B.
Steven Sunshine, the attorney for Activision Blizzard, was present for the call but didn’t interact during the hearing.