FTC Tries Again To Stop Microsoft's Already-Closed Deal For Activision

U.S. antitrust regulators told a federal appeals court Wednesday that a federal judge got it wrong when she allowed Microsoft's $69 billion purchase of Activision to close. Reuters reports: Speaking for the Federal Trade Commission, lawyer Imad Abyad argued that the lower-court judge held the agency to too high a standard, effectively requiring it to prove that the deal was anticompetitive. He told a three-judge appeals court panel in California that the FTC had only to show that Microsoft had the ability and incentive to withhold Activision's games from rival game platforms to prove the agency's case. He said the FTC "showed that in the past that's what Microsoft did," referring to allegations that Microsoft made some Zenimax games exclusive after buying that company. Speaking for Microsoft, lawyer Rakesh Kilaru called the FTC case "weak" and said that the agency had asked the lower-court judge for too much leeway. "It is also clear that the standard can't be as low as the FTC is suggesting," he said. "It can't be kind of a mere scintilla of evidence." He argued that the agency failed to show that Microsoft had an incentive to withhold "Call of Duty" from rival gaming platforms. The judges actively questioned both attorneys, with Judge Daniel Collins pressing the FTC's attorney on how concessions that Microsoft gave British antitrust enforcers affect the U.S. market. He also appeared to take issue with Abyad's assertions that more analysis of the deal was necessary, especially since Microsoft had struck agreements with rivals recently, including one with Sony this past summer. "This was not a rush job on the part of the FTC," he said. Two antitrust scholars who listened to the arguments said the FTC faced a tough slog to prevail. A finding of "clear error" by a lower court judge is "really stark," said Alden Abbott, a former FTC general counsel, comparing it to the idea that a court ignored key evidence from a witness. Abbott said the appeals court noted that the trial judge had considered "a huge amount of record evidence."

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