The FTC is apparently trying to find out what is in Sony’s Call of Duty contract with Microsoft.
First, a little refresher. The FTC planned to take the Microsoft- Activision deal to their internal court, but then suddenly filed a case on federal court to block the deal completely. They lost this federal case, and would eventually fail to stop Microsoft and Activision from finalizing the deal.
However, the FTC can still appeal that federal case, and that’s what they’re doing here. It is highly unlikely that the FTC can force Microsoft and Activision to reverse their merger. That’s because of the even more stringent standards that US appeals courts have, in comparison to the federal court they already lost in.
But therein lies the rub. While the FTC cannot block the deal, they can still take actions that will undermine the deal, and cause anxiety for the entities involved. And that does not just refer to Microsoft and Activision.
Florian Mueller, now in his Florian4Gamers Twitter account, has shared this update about this deal:
“On Monday, Sony made a filing that was coordinated with the FTC and shows they’re still negotiating the scope of discovery with respect to the 10-year Microsoft-Sony CoD agreement.
The filing just asked for more time to try to work it out (until Tuesday). Granted.
Parties can have different reasons for opposing discovery requests in whole or in part. Sometimes the administrative burden matters, sometimes it’s a pretext.
I wonder what’s so hard for the FTC to understand about the 10-year CoD deal: a big GAME OVER on their screens.”
Sony’s filing revealed FTC’s recent unsavory actions. If Sony was once on the same side as the FTC in opposing the Microsoft – Activision deal, in their current position, they are effectively part of the deal.
The ten year contract they signed with Microsoft guarantees that Call of Duty games continue to come to PlayStation, with content and feature parity as other versions of the game on other platforms. This deal is contingent on the fact that Microsoft has merged with Activision. If that deal gets broken up, then Sony loses their contract.
So Sony is actually incentivized not to break that contract up, and that definitely means they would not want to share the details of the contract. But if the FTC sways the appeals court, they could legally compel Sony to do so.
And those details need not be shared with the public officially or via leaks to be harmful to Sony. It would be bad enough that FTC’s prying opens the deal up to regulation, or even more litigation.
We will find out in the coming weeks if the FTC manages to harm Sony with these actions, but the game companies involved would definitely prefer it if the FTC drops the whole case and moves on.
