Friday’s decision of the U.K.’s Competition & Markets Authority (CMA) granting final approval of Microsoft’s $69 billion Activision Blizzard buy, enabling the transaction to close, “provides an independent basis” for the 9th U.S. Appeals Court’s “affirmance” of the merger, wrote Wilkinson Stekloff partner Rakesh Kilaru, counsel for Microsoft, to the 9th Circuit clerk in a letter Friday (docket 23-15992). The CMA’s decision provides an independent basis for affirmance, said Kilaru. Activision, before the closing, agreed to divest global cloud streaming rights to all existing console and PC games, and those produced over the next 15 years, to Ubisoft, he said. Microsoft “accordingly does not own or control cloud-gaming rights for any Activision titles “streamed in the U.S. and other global jurisdictions," he said. Microsoft also agreed not to interfere with Ubisoft’s cloud streaming rights, and to give Ubisoft versions of Activision games that are on par with the non-streaming versions of those games, he said. The CMA’s decision further says Microsoft’s preexisting commitments to regulators and third parties “remain intact,” he said: “Taken together, these actions eliminate any possible claim that Microsoft will withhold Activision content from rivals in the alleged cloud streaming market.”
The court should grant the FTC’s motion to strike and dismiss defendants Iqvia and Propel Media’ s constitutional and equitable affirmative defenses with prejudice, said the FTC’s Wednesday reply memorandum of law (docket 1:23-cv-06188) in U.S. District Court for Southern New York in Manhattan. The FTC moved the court last month to strike those defenses asserted by Iqvia on the grounds that several raise constitutional challenges to the FTC’s process and powers that are “immaterial” and “impertinent” to the “narrow inquiry” that the court must undertake pursuant to Section 13(b) of the FTC Act in evaluating a claim for a preliminary injunction enjoining Iqvia from completing its purchase of Propel Media. Iqvia also raised defenses of laches and estoppel that weren't properly pled and can’t be raised against the government in the circumstances of this case, said the FTC's reply. The FTC will suffer prejudice if forced to expend resources defending against “sideshow matters that have no bearing on the Section 13(b) inquiry," said the agency. That's "especially true in light of the expedited nature of these proceedings and the far-reaching implications of Defendants’ allegations -- which attack the constitutionality not just of the FTC, but also of other federal agencies that use administrative proceedings to protect and serve the American public,” it said in September. Defendants argued in their opposing memorandum of law this month (see 2310050057) that Section 13(b) of the FTC Act allows a court to issue a temporary restraining order and preliminary injunction in favor of the FTC only after “weighing the equities” and considering its likelihood of success. “The Court must consider whether the FTC is likely to ultimately succeed on its underlying claim that the merger would be anticompetitive, and must weigh the equities of enjoining the merger pending the administrative proceedings,” defendants said, saying their constitutional defenses “challenge the constitutionality of the FTC itself as well as of the administrative proceedings in connection with which the FTC initiated this action.” Defendants didn’t cite one Section 13(b) case to support their “novel interpretation,” said the FTC’s Wednesday reply. Given the importance of constitutional challenges, “the statutory scheme of the FTC Act and the Federal Rules mandate certain procedures to ensure that the government has sufficient time to defend itself against such charges, which have implications across federal agencies,” it said. Defendants’ “self-imposed drop-dead date” for the acquisition, which they have established can be moved, “is not a basis to push this Court to grapple with far-reaching constitutional issues on an expedited schedule,” the FTC said.
DirecTV, “to avoid any doubt,” wants U.S. District Judge Paul Crotty for Southern New York in Manhattan to know that the new retrans consent agreement that DirecTV signed Sept. 16 with Nexstar doesn’t “resolve or diminish” any of DirecTV’s antitrust claims against Nexstar and its sidecar companies Mission Broadcasting and White Knight (see 2303150041), DirecTV counsel wrote the judge in a letter Thursday (docket 1:23-cv-02221). DirecTV’s arguments in its opposition to Nexstar’s pending motion to dismiss (see 2307140034) also haven’t changed, Olivier Antoine of Crowell & Moring told the judge. Nexstar argues DirecTV’s “hollow” lawsuit should be dismissed for lack of standing (see 2306270051), but DirecTV’s standing “is based on lost profits arising from the blackout of stations” owned by Nexstar, Mission Broadcasting and White Knight, said Antoine’s letter. “Those blackouts remain in effect and have continued throughout this case,” it said. DirecTV’s “escalating damages and the related harm to consumers” warrant prompt resolution of the defendants’ motion to dismiss, “so that the parties can proceed to discovery” and the merits of DirecTV’s antitrust claims, it said. Nexstar similarly told the judge in a letter two days earlier that the Sept. 16 retransmission renewal that DirecTV signed with Nexstar leaves “unchanged” Nexstar’s arguments that DirecTV lacks standing to pursue its antitrust claims (see 2310040024).
DirecTV’s Sept. 16 signing of a retransmission renewal with Nexstar Media covering 176 of Nexstar’s local stations and NewsNation leaves “unchanged” Nexstar’s arguments that DirecTV lacks standing to pursue its antitrust claims against Nexstar and sidecar companies Mission Broadcasting and White Knight Broadcasting (see 2306270051), Nexstar said. That's because DirecTV doesn’t allege it paid supracompetitive prices associated with those retrans agreements, Nexstar’s counsel wrote U.S. District Judge Paul Crotty for Southern New York in a letter Tuesday (docket 1:23-cv-02221). “Events occurring after the filing of the complaint cannot operate to create standing where none previously existed,” said Nexstar. It’s of “no legal moment” that DirecTV entered into a retrans renewal with Nexstar after filing its complaint, it said. DirecTV still lacks standing based on the facts and circumstances that existed as of March 15, it said.
The 9th U.S. Circuit Court of Appeals scheduled in-person oral argument Dec. 6 at 9 a.m. PST in San Francisco in the FTC’s appeal to reverse the district court’s denial of its preliminary injunction to block Microsoft’s Activision Blizzard buy, said a text-only notice Friday (docket 23-15992). Counsel will have the option to appear in-person or remotely, and opting to appear remotely by video won’t require a motion “at this time,” said the notice. Each side will get 20 minutes of argument, said a 9th Circuit calendar entry.
An expected September FTC antitrust lawsuit against Amazon that “materially alters the structure of the business" is "unlikely” since antitrust legislation over the past half-century “has largely favored businesses that improve consumer welfare,” wrote Wedbush Securities analyst Michael Pachter in a Thursday investor note. U.S. retail continues to function as a “highly competitive market” offline and online “despite Amazon’s success," Pachter said. Large retailers have replicated Amazon’s marketplace business model, along with digital enablers including Shopify that have “powered hundreds of billions” of gross merchandising value (GMV) “outside of Amazon’s ecosystem.” Customers are “highly satisfied” with Amazon, Pachter said, citing its No. 1 ranking for value and selection in the 2023 American Customer Satisfaction Index among online retailers and second-place ranking for overall for online retail customer satisfaction. “There is still ample opportunity with eCommerce outside of Amazon for brands/sellers of all sizes,” said Pachter, noting the success of over 2 million Shopify merchants that are on pace to generate over $230 billion in GMV this year. Citing published reports, Pachter said the FTC’s expected upcoming lawsuit will focus on elements of Amazon’s marketplace, including its third-party seller services, logistics and advertising, plus allegations it prevents sellers from setting lower prices for their goods on other platforms. “Reportedly, the FTC is concerned about the methods Amazon uses to stimulate adoptions of seller services,” including its practice of providing preferred product placement for sellers using its service Fulfilled by Amazon, Pachter said. The FTC is also said to be considering Amazon Prime as part of an antitrust suit over concerns that the program’s bundled service approach “may have illegally helped Amazon secure its market power," the complaint said. The FTC didn’t comment.
Five months of discovery have passed, and Google “still lacks basic information” about DOJ’s claims for damages as sought in four interrogatories and a request for proposal (RFP), said the defendant in a Thursday reply (docket 1:23-cv-00108) in U.S. District Court for Eastern Virginia in Alexandria in support of its motion to compel responses to discovery requests in the DOJ’s antitrust suit against the firm. Just because DOJ’s expert will later provide a report doesn’t excuse its failure to provide damages and answer interrorgatories in ways that comply with rules, said Google, saying it’s “entitled to information responsive to our discovery requests now.” DOJ has the information, Google said, saying that DOJ told the court and Google it needed “invoice data” from Google because it “would validate and confirm purchase information collected from dozens of different sources, including FAAs and their advertising agency contractors, in a multitude of different forms, including scanned documents.” Google’s motion to compel, filed on the last day of the fact discovery period, “seeks to compel further responses to a grab bag of requests” exceeding the duration of discovery in the case, said DOJ’s response (docket 1:23-cv-00108) to Google’s motions to compel responses to various discovery requestion Wednesday. The court should deny Google’s motion to compel responses in the digital advertising antitrust case should be denied, DOJ said. The company “made little attempt to confer” with DOJ to resolve its concerns before filing the motion, it said. Google raised several alleged deficiencies “that have since been addressed,” said the response; on the rest of its arguments, Google “misstates the applicable standards and case law,” and “seeks to apply standards” to DOJ “which it has not met itself," it said. In May, DOJ said in a reply it had been unable to secure Google’s agreement to produce relevant documents from successor custodians or critical source code documents underlying key allegations in DOJ’s amended complaint (see 2306020038). Google seeks to compel discovery responses without adequately meeting and conferring, in contravention of local civil rule 37(E), said DOJ's response. Though Google said it made a “good faith effort” to narrow the dispute before filing the motion, it provides “scant evidence” of attempts to resolve issues raised in its motion, said DOJ. The defendant seeks relief on discovery responses “which were not even due, and which Google had not even seen” when it filed its motion, or on requests the parties never discussed during a phone conference, it said. Noting the nature of the advertising tech industry, DOJ said much of the information required to prepare a final computation of damages belongs to Google or other third parties. DOJ has tried to obtain that information, but Google has, in many instances, refused to provide relevant information saying it’s unduly burdensome or inconsistent with how Google stores financial records, it said. With discovery drawing to a close, minus the “millions of documents Google failed to produce” in violation of court orders, DOJ is working to prepare reports detailing the damages it has suffered, it said.
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.
Google, a nonparty to the FTC’s lawsuit to block Microsoft’s Activision Blizzard buy on antitrust grounds, renews its request to seal a portion of one sentence in the FTC’s final proposed findings of fact and conclusions of law, said its statement in support Thursday (docket 3:23-cv-02880) in U.S. District Court for San Francisco. The section of Google’s declaration in the FTC document that Google wants sealed “contains commercially sensitive details regarding Google’s financial investment in its Stadia business which, if disclosed, could reveal Google’s forward-looking business strategies,” said the statement. Stadia, Google's cloud gaming service, was launched in November 2019 and shut down in September. “Legitimate confidentiality and competitive interests warrant the sealing of this highly confidential information, the disclosure of which would cause injury to Google that could not be avoided through any less restrictive alternative to sealing,” it said. “Any public interest in disclosing the redacted information is outweighed by the prejudice that will result to Google,” it said.
Google moved the U.S. District Court for Eastern Virginia in Alexandria to order DOJ to answer a request for admission within seven days, said a Friday memorandum (docket 1:23-cv-00108) in support of its motion to compel a response in the January antitrust case brought by DOJ and eight states (see 2301240055). The plaintiffs want Google to divest its digital advertising platform, including its DFP ad server and AdX ad exchange, to “cure any anticompetitive harm.” Google followed the court’s guidance and served “straightforward requests for admission” to DOJ about its departments’ and agencies’ alleged purchases of open web display advertising from Google, said the memorandum. Whether those departments or agencies did make direct purchases “could be fleshed out in discovery ‘rather quickly,’” said the filing, citing Illinois Brick v. State of Illinois. “As the Court recognized, Google is entitled to discovery on whether the United States is a ‘buyer' of open web display advertising directly from Google because, with certain narrow exceptions, only direct purchasers have antitrust standing to sue for damages under the Sherman Act,” said the memorandum. Google moved to dismiss the amended complaint on grounds that the DOJ lacks antitrust standing under Illinois Brick, but the court rejected that argument, saying whether the U.S. was a direct purchaser was a factual issue. The court said the only argument Google might have would be if it had used one or two middlemen, which would require discovery. “Consistent with the Court’s guidance," Google’s RFA 1 states, "Admit that, during the Damages Period, the Federal Agency Advertisers did not purchase ‘open web display advertising’ directly from Google,” said the memorandum. Google asks the court to overrule the DOJ’s objections and say the agency's response to Google’s RFA 1 is “insufficient and in non-compliance with Rule 36,” and that the DOJ be ordered to answer RFA 1 within seven days, it said. A hearing is set for Friday at 10 a.m. EDT for Google to present oral argument in support of its motion to compel a response from DOJ.