In a high-stakes legal move, Microsoft has served Sony Interactive Entertainment with a subpoena as it prepares to defend itself in an upcoming antitrust lawsuit with the Federal Trade Commission (FTC).
For those not in the know, Microsoft is expected to wage an imminent legal battle with the US government’s Federal Trade Commission on the grounds that its acquisition of Activision Blizzard will “suppress competitors” to an unlawful extent. A recent court filing shared by Stephen Totilo of Axios Twitter (opens in new tab)has revealed that Microsoft has now subpoenaed Sony in an attempt to build a strong legal case to protect its interests.
A summons is a legal writ ordering a person or corporation either to attend a court hearing or to produce documents before that hearing. According to a court filing, Microsoft wants Sony to present details of PlayStation’s game production pipeline to help strengthen its case.
Suffice it to say, this is the kind of information that Sony, most likely, would prefer to keep close to its chest. At the time of writing, Sony has until January 27th to respond to the subpoena. It may choose to limit or quash the order in court, but whether this strategy will work for the company remains to be seen.
courtship intrigue
In December 2022, the FTC announced its intention to sue Microsoft in an attempt to block its $69 billion acquisition of Activision Blizzard. Sony previously expressed Worry (opens in new tab) that the acquisition aims to make PlayStation “a less close and effective competitor to Xbox”, allowing Microsoft to be a “one-stop-shop for all the best-selling shooter franchises on consoles” … [setting it] free from severe competitive pressure”.
In response to the FTC lawsuit, Microsoft and Activision Claim (opens in new tab) Their merger, and specifically their acquisition of the Call of Duty franchise, “couldn’t upstage a highly competitive industry”. “Giving consumers high-quality content in more ways and at lower prices is what antitrust laws are supposed to promote, not deter,” the response said. Microsoft has been adamant that the acquisition is in the best interests of gamers, so it’s possible this subpoena is designed to help the tech giant turn over evidence to support this particular argument.
This is hardly the first time in recent years that FTC rulings have affected the video game industry. In December 2022, the regulatory body ordered Epic Games not only to pay a fine of $275 million for violating the Children’s Privacy Act, but also to pay $245 million in refunds to users on the grounds that they were “unwarranted charges”. “I was tricked (via FTC.gov (opens in new tab),
The FTC has also investigated the use of loot boxes in games, and famously published a paper on the subject in 2020 that “highlights public concerns”. [about] Loot box marketing techniques that may encourage players to overspend or hide actual costs through confusing terms or insufficient disclosure”via FTC.gov (opens in new tab),
While it’s early days, the outcome of the FTC’s lawsuit against Microsoft, as well as whether or not Sony’s subsequent subpoena is upheld in court, will undoubtedly have a significant impact on the financial landscape of the video game industry.