An administrative law judge from the Federal Trade Commission (FTC) upheld part of Microsoft’s subpoena to Sony Interactive Entertainment (SIE). This means that the latter will be forced to disclose the documents specifying its exclusive contracts.
In preparation for a legal battle with the FTC on antitrust grounds, Microsoft requested access to various Sony-owned documents to build the case. Microsoft’s proposed takeover of Activision Blizzard has raised concerns from both the FTC and the UK government, which are concerned that the takeover will lead to exclusivity deals that could reduce competition in the video game market – in violation of antitrust laws.
Microsoft is in the process of building an argument that dispels these concerns. In addition to signing a historic deal with Nintendo to bring Call of Duty back to their platforms, Microsoft has requested documents from Sony to use its own exclusivity deals to bolster its legal position.
IN court order (opens in a new tab) of February 23, it was ruled that “Application of SIE [to quash the subpoena] is partly granted and partly rejected. While this may seem quite ambiguous, the order makes a very important statement on the matter, stating that “the nature and extent of SIE’s content licensing agreements are relevant to … allegations of exclusivity agreements between video game console developers and developers and video game publishers.”
Sony’s legal counsel tried to argue that the sheer burden of reviewing these documents made the process unenforceable, however the injunction countered by stating that “the alleged burden of having to review the excessive number of contracts is greatly reduced as … be limited to January 1, 2019 to at the moment.”
That said, part of Sony’s request for annulment has been upheld, meaning the order is not a complete legal victory for Microsoft. Microsoft has made an interesting request for documents regarding the performance reviews of Sony president and CEO Jim Ryan, as well as those who report directly to him. This request prompted Sony to accuse Microsoft of “obvious harassment” in February, stating that “this is not an employment matter” (by Eurogamer (opens in a new tab)).
In addition, Microsoft originally sought access to exclusivity documents from the last 10 years, but Judge Chappell granted Sony’s request to limit the scope of documents Microsoft would have access to, ensuring that the scope of available data would only extend back to 2019.
However, according to Microsoft’s lawyers, this three-year window will likely be more than enough to allow them to bolster their legal defenses against the upcoming battle with the FTC.
However, it is still early days and it remains to be seen how exactly the case will develop in the coming year. However, there is no denying that the outcome of this case will have far-reaching consequences for the entire video game industry.