Right before the midnight Pacific Time deadline, Microsoft and Activision Blizzard filed their (joint) opposition to
the Federal Trade Commission's motion for a preliminary injunction...
The above PDF contains all of the publicly available exhibits, by far the most interesting one of which is a public version of
the commitments Microsoft made to the European Commission regarding cloud streaming (starting on page 102 of the PDF). The only public exhibit that is missing from the PDF for technical reasons is a shareholder report by Sony that can easily be obtained elsewhere. As usual, the expert reports are not made public.
While heavily redacted, the following passage from the court filing is revealing and potentially damning (click on the image to enlarge or read the text below the image):
[From that document]
"First, there is no evidence to support to support the FTC's central tehory that Xbox will take COD away from PlayStation. The FTC does not cite a single document or witness even suggesting this will happen. On the contrary, Jim Ryan, the CEO of Sony Interactive Entertainment ('SIE') and the chief commercial opponent of this deal, said privately on the day it was announced [REDACTED]"
It is not unheard of that an executive reacts to a merger announcement in one way and later, with a view to regulatory reviews, takes the opposite side. I remember a private email exchange I had with someone well over 10 years ago about a merger, and in that case the person stated clearly in the email that the merger was about an incumbent eliminating a nascent competitor--but a few months later he'd meet with the European Commission and say the opposite.
If it is well-documented that Sony wasn't truly worried about vertical input foreclosure, why is the FTC still clinging to that console market theory of harm? Why isn't the venerable agency instead trying to achieve a great outcome for competition and for gamers?
The console market theory of harm--according to which Microsoft's Xbox would cause anticompetitive harm to Sony's PlayStation--has been universally rejected. The regulators in charge of 39 countries have approved the deal, and in a 40th country--the United Kingdom--a blocking decision (which is now being appealed) issued, but the console market theory of market was previously thrown out...
I downloaded the public version of the opposition brief immediately upon its filing and, in parallel to reading it, commented on it in a 45-part Twitter thread that mostly consisted of quotes from the brief:
