A big moment happened in the FTC federal case vs the Microsoft Activision deal last Friday. Phil Spencer’s commitment to Call of Duty on future PlayStation consoles became a big deal, not just because of the commitment itself, but because it may have already decided this case.
This all starts while Phil is under cross-examination in the middle of the trial. He explained why Microsoft was publishing games on PlayStation in the first place. And then, as recorded by Florian Mueller in his live tweets thread, Phil explained the situation with Call of Duty on PlayStation:
“Spencer: If a game is already loved by customers on a platform, they want to nurture and grow that for the games they build. When building a new game that has no customers today, thinking about maximizing creative capability while minimizing cost of production.
Phil Spencer, asked by Microsoft’s own attorney, explains again that losing CoD on its largest console platform would not be economically viable.
Says Microsoft partners with PS incredibly well outside of this deal (meaning outside the merger review stuff).
Spencer: pulling CoD from PS in my view would create irreparable harm to Xbox’s brand (because of gamer outrage).
Judge Corley asks to testify under oath that future versions of CoD will be made available for PS. Spencer: absolutely. Will raise my hand.”
It was this last moment that is relevant to us now. When Spencer made that commitment, it was understood that he was under oath, and lying on that oath is a possible charge of perjury. As explained in this law firm’s website, perjury is a felony punishable by as much as four years in jail, not a charge to be taken lightly.
To complicate matters, this particularly puts pressure on Phil, because if he leaves Microsoft and the company then makes that decision, could he be found liable for that crime? That would only be a hypothetical for now.
Later, the FTC tried to take advantage of the situation in a very strange way. We now move to coverage from Michael Acton, a reporter who, like Florian, watched and live tweeted about the meeting:
“Ok, the FTC is back and trying to grill Spencer on his vow about keeping COD on PlayStation.
“Can you swear under oath that without looking at any of the terms you will ship all versions” to PlayStation.
“That’s my goal yes”
FTC lawyer repeats – Can you swear under oath that you can promise that you will ship COD on PlayStation, all the future versions, whatever they will be, without knowing terms?
“It’s not going to be for zero dollars.” Judge interjects to say that was clear.
Are you going to make the same promise with regards to all of Activision’s content?
Spencer – Activision ships games on many different platforms, some PC-only games, like WoW – don’t think can make a blanket promise.
What about Diablo? Is he able to promise?
“I am *able* to promise” – Spencer says, meaning that it is something he is empowered to do, not that he will do.
Are you able to bind the corporation here today?
Microsoft lawyer objects.
Judge – “why don’t we move along.”
Now, many gamers observing the trial opined that FTC was for some reason trying to use this situation to blackmail Microsoft into giving concessions to Sony to get the deal to go through. In fact, something else was going on.
FTC’s line of questioning was intended to find something that Microsoft would say no to. They would then be able to point to that as the smoking gun vs Microsoft, to get the injunction approved.
Unfortunately for the FTC, that line of thinking clearly failed, because the judge was not buying it. By interjecting in the line of thinking, and eventually telling Microsoft’s lawyer to move on, District Judge Jacqueline Scott Corley indicated that she was not interested in what the FTC was trying to do.
But of course, the reason for that goes back to Judge Corley’s own question to Phil. She confirmed directly from Phil that Microsoft intended to keep bringing Call of Duty to PlayStation. If Call of Duty games did keep coming to PlayStation under Microsoft’s name, then the FTC has no reason to try to block the deal.
As Destin revealed in his YouTube video about this same trial date, there was an audible gasp when Judge Corley interrupted the FTC lawyer. This seems to be the point where many observers believed that the FTC lost the case they were making.
At this point, the FTC may try to bring in new arguments, but they will have to come up with something very strong to pull their case back. That means having to convince Judge Corley that there is still something else to consider, after she directly confirmed from Microsoft that the case for this injunction isn’t really valid.
And that’s what we will be looking forward to for this week, when the trial is set to end.