Just watching the motion-to-dismiss preliminary injunction hearing in San Francisco. One of the class-action lawyers is now trying to address Judge Corley's doubts that there is irreparable harm to gamers if they need to play (in theory) CoD on Xbox instead of PlayStation.
🧵1/X twitter.com/i/web/status/1…
The judge described #Microsoft's argument against the PI as follows: those gamers won't suffer harm now. By the time the harm occurs and they need to switch from Xbox to PS, they may have kids and no longer find time to play CoD.
🧵2/X
Judge Corley says the record does not support the notion of CoD being made exclusive to Microsoft's platforms in six months or so. Maybe further down the road, but she asks the class-action lawyer what he thinks the relevant period for a preliminary injunction is.
🧵3/X
Microsoft's lawyer says everyone should be able to agree that a 10-year horizon is too far out and even with 5 years he has strong doubts.
Judge Corley would like to hear how many months/years are a reasonable period for the harm to occur so it matters legally here.
🧵4/X
Microsoft's attorney now says that regardless of timing, the alleged harm is that someone has to buy an Xbox, and that is monetary, not irreparable.
Judge Corley says they'll get to that, too.
🧵5/X
LOL it appears the judge really understands console warriors' thinking: "Maybe they don't like Microsoft." They don't want to buy an Xbox.
Microsoft's attorney says the sworn declarations don't say they wouldn't buy an Xbox. But judge meant this just hypothetically anyway
🧵6/X
Judge Corley presses class-action lawyer (who argues that the threat of a lessening of competition, they can get an injunction) what the exception would be where he would NOT get a preliminary injunction.
"Alright, so you ALWAYS get a preliminary injunction then?"
🧵7/X
He basically says yes, and she (Judge Corley) says: that's not how it works, "that argument I'm not gonna accept."
Now the class-action lawyer is trying something else...
🧵8/X twitter.com/i/web/status/1…
Judge: "your client can keep doing exactly what they're doing for quite some time. They can play their games with their friends, 2 1/2 hours a day"
Class-action lawyer says the "danger" (of less competition) changes everything immediately.
Judge: then you ALWAYS get a PI
🧵9/X
Now arguing for Microsoft: Valarie Williams of Alston & Bird. alston.com/en/professiona…
Says class-action lawyers read requirements (immediacy, irreparable harm) out of the cases they cite.
🧵10/X
Microsoft's lawyers explain: in cases where consumers did get injunctions against mergers (such as Calif. suing on behalf of all of its citizens), it was not just about money but e.g. some people's geographic access, such as grocery stores consolidating immediately.
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And in another case, it was about fishermen whose livelihood depended on being able to sell their catch and with the consolidation of the two companies in question, those fisherman were likely to have a hard time making a living selling their fish at a good price.
🧵12/X
Class-action lawyer argues that in both those cases (grocery stores, fishermen) it was about the DANGER (he loves that word, he uses it in almost every sentence and tends to emphasize it).
🧵13/X
Class-action lawyer Saveri: ABK is right now developing games for rivals to Microsoft's platforms, "the second this merger occurs no more games from Activision on other platforms." Argument: "past conduct"
Judge almost shocked: "WHERE is THAT?"
🧵14/X
Judge says: "Call of Duty is all your clients are talking about. I've read the declarations carefully, this is all about Call of Duty."
Class-action lawyer: CoD will no longer be made for rival platforms.
Judge: WHERE is the EVIDENCE for that? That's not what I see.
🧵15/X
Now class-action lawyer Saveri says that after the merger ABK's titles would be exclusive to Microsoft's cloud-gaming platform.
=> That is so crazy given Microsoft's deals with Nvidia, Boosteroid, Ubitus, EE, nware!
🧵16/X
Judge Corley: "we're not talking about closing grocery stores, ... why couldn't a court say, if that is the case, you have to make your games available on Sony's competing cloud services?"
🧵17/X
I have to correct myself, the last few things I attributed to class-action lawyer Saveri were said by someone else from his firm named Seidel.
🧵18/X
Class-action lawyer Seidel: CoD games will become available on Game Pass.
Judge: CoD currently not available on Game Pass and on Sony's competitive ...
Class-action lawyer has to concede that's true. So judge doesn't see immediate irreparable harm.
🧵19/X
Judge to class-action lawyer: "You're not the FTC" -- that because government plaintiffs (antitrust agencies) can seek injunctions on a different basis, but not just some gamers who can't say they're harmed. They can keep playing the CoD versions they have on PS etc.
🧵20/X
Microsoft's lawyer: it's definitely the plan to put CoD on Game Pass, but don't know the timing.
🧵21/X
Class-action lawyer Alioto: "we have a substantial right to be afraid of a danger of something". It could be higher prices. It could be you stop the investment. ... They could do a lot of things. "The day after, Mr. Smith says OK we're taking CoD away from PlayStation."
🧵22/X
Microsoft lawyer Williams: "all of these things are potential future alleged harms to competition and there's nothing that's happening immediately and nothing that is happening to these plaintiffs"
🧵23/X
Judge to class-action lawyer Alioto: "you don't include @EpicGames [among AAA game makers] because Fortnite is free, but your experts say in-game purchases are very important"
🧵24/X
Judge wants to know whether Microsoft would put CoD on other services. Microsoft lawyer Williams now mentions multiple 10-year agreements with cloud service operators. Evidence such as Nintendo agreement shows Microsoft wants to make CoD available to more gamers.
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Microsoft lawyer Williams: on AAA games it's hard to tell what games are in or out. Is Candy Crush in? Is Microsoft's Minecraft in? I understand it's an industry term, but that doesn't make it a relevant antitrust market. Just the very definition of it doesn't fit.
🧵26/X
Microsoft lawyer Williams: CMA did find that AAA games was not a relevant market.
🧵27/X
Focus now shifts to vertical foreclosure theories. Microsoft lawyer Williams says good analogy for critical input is like when car manufacturers can't make cars without chips and if one manufacturer bought a chipmaker and could damage competition.
🧵28/X
Judge: isn't CoD 20% of all sales of ... one game. ONE GAME.
🧵29/X
Microsoft lawyer Williams: "nobody wants to make the gamer community angry"
🧵30/X
Microsoft lawyer Williams is now arguing that the absence of irreparable harm not only weighs against a preliminary injunction but also a reason to dismiss the complaint in its entirety.
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Judge: Why isn't being able to play on the console of your choice an irreparable harm?
Microsoft lawyer Williams: consumer choice is not typically found to be irreparable harm.
🧵32/X
Judge asking Microsoft lawyer: American Stores was example of consumer choice ... stores ... reduced
MSFT lawyer Williams: here, it's not an every week purchase, not a purchase you NEED to make, these 10 plaintiffs they buy games, that would be easy to calculate
🧵33/X
Judge asking Microsoft for updated information on timing. Microsoft lawyer will firstly finish her argument on why there's a failure to plead irreparable harm and the complaint should be dismissed.
Next, timing:
🧵34/X
Microsoft lawyer Beth Wilkinson says they don't know yet what the CATribunal hearing date is, and they can only take a position on timing when they know that. Also other regulatory decisions they haven't received. "At this point it would be very difficult to close."
🧵35/X
Hearing is over.
There realistically won't be a preliminary injunction: the class-action lawyers did not make a single argument on the IMMEDIACY of any alleged irreparable harm that would persuade the judge.
But I guess the complaint won't be dismissed in its entirety.
🧵36/37
I was following via Zoom, not in the courtroom. I have live-tweeted from courtrooms in California (San Jose, San Diego) though.
Sorry I couldn't answer most questions as I typically always had the window open to create the next tweet and had to follow the hearing.
🧵37/37
Just noticed I mistyped: from PS to Xbox, of course
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