FTC Seeks to Bar Microsoft, Activision From ‘Selectively Waiving’ Privilege

The agreements that Microsoft “hastily sought” with some of its competitors as part of its “eleventh hour attempt to assuage the concerns of regulators” about its Activision Blizzard buy (see 2306220070) “are filled with loopholes and speculative commitments,” said the FTC’s redacted bench brief Friday (docket 3:23-cv-02880) in U.S. District Court for Northern California in San Francisco regarding the defendants’ “proffered testimony” about those agreements. All the agreements “purport to bring Activision content to rivals’ platforms” contingent on the consummation of the transaction, said the brief. Microsoft and Activision intend to make the agreements “central to their defense,” the brief said. The FTC expects Microsoft executives to continue to testify about the agreements’ purported benefits despite having wielded privilege “as a shield to withhold information relevant to testing those purported benefits,” it said. Microsoft and Activision “are incorrect that the FTC has been dilatory because it did not move to challenge the privilege claims and compel testimony,” it said. The defendants “protected this evidence from discovery on grounds of attorney-client privilege, which the FTC assumed was made in good faith and had no reason to contest at the time,” it said. The FTC is entitled to prevent the defendants from “selectively waiving that privilege” to elicit testimony about the beneficial effects of the agreements, or to allow one of its expert witnesses “to base his opinions regarding the procompetitive effects of witnesses whose foundation is locked behind privilege,” it said. Those agreements have no “place in these proceedings,” it said.