Judge dismisses gamers’ claims that Microsoft-Activision merger will spoil gaming

[Teh One Who Knocks]

ASHLEY BELANGER - Ars Technica




Last December, Call of Duty gamers sued Microsoft, seeking to block its merger with Activision, partly because they alleged that the merger would set up Microsoft to dominate industry rivals, drive up prices, and reduce consumer choice. Yesterday, a California judge, Jacqueline Corley, granted Microsoft’s motion to dismiss the suit, saying that the gamers didn’t “plausibly allege” that the merger “creates a reasonable probability of anticompetitive effects in any relevant market.”

Gamers suing don’t plan to give up this fight that easily, though. They have 20 days to amend their complaint to include more evidence that demonstrates those anticompetitive effects are likely to harm them personally.

The gamers' lawyer, Joseph Alioto, told Ars that he believes they have ample evidence to satisfy the judge in this case. He confirmed that gamers intend to file their amended complaint as soon as possible. Rather than being discouraged by the judge’s dismissal, Alioto told Ars that the gamers were pleased by Corley’s order.

“We think that the order is terrific, because it actually states exactly what the judge wants,” Alioto told Ars. “We have more than sufficient evidence to respond to her directly and intend to file the amended complaint as soon as possible. Certainly, we believe within the next 10 days or earlier.”

In her order, Corley asked gamers for additional evidence to support claims that the merger would potentially foreclose access to games, harm specific gaming industry markets, and perhaps most importantly, harm gamers like them. Her order is peppered with specific questions that gamers now have a chance to answer like, “Why would Microsoft make Call of Duty exclusive to its platforms thus resulting in fewer games sold?” and “What is it about the console market or PC games market and Microsoft’s position in those markets that makes it plausible there is a reasonable probability Microsoft would take such steps?”

In another example, Corley’s order told gamers that “what are missing are allegations that plausibly suggest it is reasonably probable to make economic sense for Microsoft to make the successful Activision gaming franchises exclusive.”

Because the initial complaint lacked evidence to support the majority of plaintiffs’ claims, Corley granted Microsoft’s motion to dismiss. When Ars asked Microsoft for comment, a spokesperson pointed Ars to that motion, which says that gamers’ claims are “unripe” and “lack standing.”

Because Corley went into such detail, Alioto told Ars that gamers suing are still hopeful that they can stop the merger.

“The judge stated exactly what she thought was missing,” Alioto said. “And we're going to make sure that she gets absolutely everything that she wants, because that's what the evidence shows in the case. This is an enormous attempt by Microsoft to continue its efforts to try to eliminate competition.”

Previously, Microsoft attempted to pause the gamers’ lawsuit pending the outcome of the Federal Trade Commission’s investigation into the merger, Reuters reported. But the court denied that motion, and now Alioto told Ars that the gamers’ lawsuit has become “obviously very important” because the FTC has not yet filed a federal lawsuit. He said that means that the FTC cannot get an injunction to stop the merger the way that gamers could if they win their lawsuit.

“So we're the only one they have to get over,” Alioto said. “We're the only ones really representing the likelihood of competition prevailing in this particular case, or not.”

Gamers have until early April to supply the evidence missing in their complaint and prove that the merger would potentially give Microsoft ultimate control over game prices, game production, and innovation in gaming. That effort is already underway, as gamers suing strongly feel that the facts support their claims that the merger would harm them personally and that they're the only ones who can quickly act to block the merger.

“It's a very serious effort by [Microsoft] to eliminate competition across the board,” Alioto told Ars. “And we intend and believe that we will stop it.”

[Godfather]

Shoulda tried that 20 years ago. Not that it woulda worked then, but at least there were studios worth trying to save.