Judge Who Denied Microsoft/Activision Injunction Agreed With FTC on ‘Key Elements’

U.S. District Judge Jacqueline Scott Corley for Northern California in San Francisco denied the FTC’s motion for a preliminary injunction July 10 to halt Microsoft’s Activision buy (see 2307110061) “despite agreeing with the FTC on key elements such as the relevant geographic and product markets for analysis,” said the agency’s 9th U.S. Circuit Court of Appeals mediation questionnaire Monday (docket 23-15992) in support of its appeal of Corley’s denial. Corley found that the combined firm “would have the ability to foreclose its rivals, and would likely offer Activision content exclusively on Microsoft’s Game Pass service, but not on rival services,” said the questionnaire. The judge nevertheless denied relief because she views Microsoft as “lacking the post-merger incentives to foreclose rivals” in the consoles and cloud gaming markets, and because she viewed the deal, on balance, as “procompetitive in the multi-game library services market,” it said. She also deemed Microsoft's post-complaint “side deals” and offers “as negating the incentive to foreclose and thus sufficient to remedy any substantial lessening of competition as a result of the merger,” it said. Though Corley’s order denying the injunction “acknowledged that the record contains at least conflicting evidence of anticompetitive effects,” she found that the equities “do not support preliminary relief,” it said. On appeal, the principal issues are likely to be the district court's “misapplication” of Section 13(b)'s legal standard for relief and the “sufficiency” for preliminary relief of the court's finding of foreclosure in the multi-game library services market, said the questionnaire. Another key issue on appeal will be Corley’s erroneous "counting" of the defendants' “proffered remedies” as part of the FTC's "likelihood of success" analysis, it said.