Earlier today, we had reported on how FTC had largely denied Sony‘s request to quash a Microsoft subpoena requesting that it divulge confidential documents. From the surface, it seems as if the Activision Blizzard merger has been dragging on for too long, with Sony showing no signs of pulling back.
For those unaware, much of the debate around Microsoft’s acquisition revolves around Call of Duty, which Sony claims may be withheld from it to some degree following the deal. Even after Microsoft had offered a ten-year exclusivity deal, Sony doesn’t want to step back, and instead want to squeeze out as much as they can.
However, we have now seen how its not only Microsoft that is answerable in the court.
Given that Microsoft has argued that gaining access to Activision Blizzard‘s IP could lead to Xbox-exclusive titles that could negatively impact competition, it is important to understand the full extent of Sony’s own exclusivity deals and their effect on industry competition.
Sony countered by attempting to have Microsoft’s subpoena quashed, on the grounds that some of the requests were unnecessary and would take too much time and money to fulfil. However, the FTC’s chief administrative law judge has ruled against Sony on most of its claims.
Sony asked for documentation of all content licensing agreements it has signed with third-party publishers since January 1, 2012. Sony argued that it would be “unduly burdensome” to manually review over 150,000 contract records to find the relevant ones in order to compile these documents.
The FTC, however, disagreed and argued that it was crucial to the case to know the scope of Sony’s exclusivity deals.
Despite this, the FTC did agree to Sony’s request to narrow the time frame for which it would be permitted to collect documents. As a result, only documents dated January 1, 2019 and later will be required.
Sony also asked that the subpoena be limited to exclude the records of a select few employees. Sony claimed it would take more time and money to search through these files because they were written in Japanese.
The FTC, however, did not buy Sony’s claim that it would be an undue burden to find and produce the relevant files in question and thus rejected the company’s argument.
The FTC rejected this, saying Sony couldn’t “persuasively explain why searching for and producing [these] files presents an undue burden”.
With these developments, it seems as if some progress is being made, and Sony is itself being questioned in the court. This ongoing battle between Microsoft and Sony highlights the importance of understanding the full extent of exclusivity deals and their impact on industry competitiveness.
While this is all we know for now, rest assured that we will keep you updated as new information becomes available.