Microsoft has pulled a surprise move on Sony in the middle of the FTC’s litigation regarding the acquisition of Activision Blizzard King. Sony has been subpoenaed to speak on their defense in the upcoming trial.
Microsoft wants their rival to divulge details of their rival’s game production pipeline. This may include confidential details of that pipeline. In case it isn’t clear, Microsoft is absolutely serious about this subpoena, and the two parties are currently negotiating under what terms and to what extent Sony will disclose their business practices.
For their part, Sony has until January 27, 2023, the end of this week, to respond. They can move to limit, quash, or respond to the subpoena. The actual trial itself won’t be beginning until August 2023.
This is a significant turn from when Microsoft had offered Sony a 10 year contract to keep getting Call of Duty games on their platforms. That was only a little over a month ago, and at the time Microsoft had sought to simply negotiate the terms of this acquisition with rivals and competition/antitrust regulators.
But it seems the FTC lawsuit has raised the stakes for Microsoft. It is possible that Sony will use this opportunity to bolster their case, that approving the acquisition will be bad for competition in the industry. However, this move seems calculated to get Sony to slip in front of the FTC courts.
As a legal expert had publicly opined, the case the FTC filed vs Microsoft is built entirely on anecdote and won’t stand up to the court. If this is in fact the case, then FTC judge Michael Chappell’s court would eventually rule in Microsoft’s favor.
However, Sony being forced to testify on their own business could prove damaging to them. Even if the FTC decides not to disclose these details to the public, the FTC themselves will be made aware if Sony themselves are guilty of practices that could be deemed anti-competitive.
While direct comparisons can no longer be made in public because of how the game companies report their profits, it’s widely believed that Sony once again has a wide lead on Microsoft in the console market. If that is the case, then Sony themselves could see FTC action taken vs them. This could all now be instigated by the FTC, with no prodding from Microsoft’s part. If Microsoft is ultimately disallowed from finishing their acquisition, the end result may drag Sony down with it.
It’s the sort of thing that may make Sony wish they hadn’t shaken this hornet’s nest to begin with. With all that said, it is still a few weeks away for the case to go to court, and Microsoft and the FTC could find a way to a settlement before it gets there.
Source: Video Games Chronicle
