Microsoft Analyzes US Legal Argument Against Acquisition of Activision
During the government’s legal battle against Microsoft’s proposed acquisition of Activision Blizzard for $69 billion, Harvard economist Robin Lee faced challenges in clearly illustrating the negative impact the deal would have on gamers.
The U.S. Federal Trade Commission has asked a federal judge to temporarily halt the deal so an internal judge at the agency can decide whether it can proceed. However, the losing party in federal court often concedes and the in-house process does not proceed. Microsoft’s lawyer pressed Lee for details of his analysis of potential market share gains for the Redmond, Washington-based company’s Xbox division, particularly the impact on gamers who would migrate for the wildly popular Call of Duty video game. is made by Activision.
Lee admitted that his analysis did not take into account anything other than the complete exclusivity of “Call of Duty” on Xbox, and did not show what might happen if the game was available on Nintendo’s Switch. If the deal goes through, Microsoft has promised to supply the game to the Switch for 10 years.
Microsoft attorney Beth Wilkinson pressed Lee to try to poke holes in his analysis of the deal, pointing out the limitations of his financial modeling. At times the questioning was probing, including when Wilkinson forcefully said, “Professor Lee, can you answer my question?” of the fine detail of his report.
Wilkinson seemed frustrated with the difficulty of parsing Lee’s answers, so at one point he mapped out his market share assumptions on a whiteboard for the judge to see. Judge Jacqueline Scott Corley, the San Francisco federal judge presiding over the case, had no comment Tuesday. The FTC says the deal would give Microsoft exclusive access to Activision games, leaving Nintendo and Sony Group out in the cold. Microsoft has argued that it would be better off financially by licensing the games to all players. The deal has been approved by many jurisdictions, but has been opposed by the US FTC and the UK’s Competition and Markets Authority.
