The court's decision from the hearing between Microsoft and the FTC is expected in the next few days, which will be crucial in determining whether Microsoft can complete the acquisition of Activision/Blizzard by the next deadline.
While on the one hand one can certainly taken into accountDespite the possibility that things could go wrong and the hearing could go in favor of the FTC, Microsoft is quite optimistic that the judge will rule in their favor. The reasons why will be explained in the... Final statement explained.
Is the FTC failing to fulfill its duties?
Essentially, Microsoft explains the FTC's core function: defining the antitrust market and the interests represented within it. A distinction is made between a product market and a geographic market, with the FTC's task being to define the relevant market where the allegedly anti-competitive effects of the planned acquisition are expected.
The product market encompasses products and services with which the defendant's products compete, specifically mentioning high-performance consoles, subscription services, cloud gaming subscription services, and game and cloud gaming subscription services, while the geographic market is defined as the market to which consumers can practically turn, in this case, the United States. Both cases cite previous judgments that further clarified these definitions.
"Like the product market, the geographic market must also reflect the commercial realities of the industry and be economically significant."
Should the FTC have failed to define these markets in the specific case during the hearing, Microsoft believes the FTC's lawsuit must be dismissed. Microsoft argues that certain circumstances were not clarified during the hearing.arbitrarily“The fact that the PC market and the Nintendo Switch were excluded as relevant competitors was disregarded, giving the Xbox a certain market power. Regarding the geographically relevant market, Microsoft argued that all manufacturers operate worldwide, not just in the USA.”
Microsoft would only be more competitive
Microsoft had emphasized in particular that it was active in the console market. the loser is and only holds third place among the major manufacturers. A merger with Activision would merely make them more competitive, but by no means would they suddenly become the market leader or have the power to effectively cannibalize each other's market share. Furthermore, it is believed that the FTC failed to adequately demonstrate, particularly regarding content, subscription services, and other areas, why the acquisition of Activision posed such a significant threat, especially given Sony's existing market leadership in these fields.
Overall, it seems the FTC went into this hearing unprepared and will ultimately suffer a huge embarrassment. We'll find out in the next few days.
