Microsoft and Sony are now both directly involved in the gamers’ lawsuit filed in California. This is the lawsuit running parallel to the FTC lawsuit vs the Microsoft – Activision deal.
Updates on this lawsuit are courtesy of Florian Mueller, who is tracking this case, as many others unrelated to video games, in his capacity as an IP competition analyst.
We had previously reported that Sony seemed to have helped draft the plaintiff’s amended complaint vs the deal. That has yet to be considered by the judge, but things have already escalated.
On April 16, 2023, Florian shared this update:
“On Friday counsel for #Sony appeared in the private lawsuit in San Fran for the first time, and later #Microsoft’s lead counsel from the #FTC in-house case did so, too.
The most likely explanation is a discovery dispute. See the underlined sentence (Apr 7 status report).”
Florian has underlined a sentence that says “Microsoft intends to seek further discovery from Sony as necessary.”
Without getting too technical here, the discovery process in a court case is the part of the legal case where both sides try to agree to a certain sequence of events leading to the lawsuit. In this situation, Microsoft wants to make sure both sides agree on the basics of the Activision deal.
Florian explains further:
“In that case we’ll likely see a discovery motion (such as a motion to quash by Sony) in the coming days.
A discovery dispute is most likely given that those lawyers entered their appearances on the same day and that the Apr 7 status report indicated a potential conflict.
It would be a discovery dispute of major implications. Otherwise #Microsoft’s lead counsel from the FTC case wouldn’t appear for that purpose. Discovery is typically left to non-lead counsel. There are other possible explanations, so it’s not necessarily just discovery.”
And then, yesterday, Florian revealed that Judge Jacqueline Scott Corley granted Microsoft’s Beth Wilkinson to appear in the lawsuit.
We’ve reported on Beth Wilkinson before, the lawyer who secured the Oklahoma City Bomber’s conviction. Activision CEO Bobby Kotick opined that Beth would crush the FTC in their lawsuit.
This action by Judge Corley was really a small formality, but now Atty. Wilkinson can make filings in the case.
It isn’t clear for now if Sony will bring their own high profile lawyers to the case, but obviously Microsoft is pulling out all the stops to get any holes plugged from finalizing their deal.
If you didn’t know why, that’s because Microsoft has a deadline of July 18, 2023 to finalize the deal. If they fail to meet this deadline, they will have to pay Activision a $ 3 billion breakup fee.
Realistically speaking, Activision will probably take to the negotiating table with Microsoft to extend that deadline as a sign of good faith. But Microsoft would obviously be better off just getting the deal done before then.
Florian’s personal opinion is that the lawsuit won’t prosper, for the same reasons the CMA rejected Sony’s objections to the deal. So Atty. Wilkinson’s intervention is intended to speed up ending this particular roadblock.
