Yesterday, a judge of the United States District Court Northern District of California denied the preliminary injunction requested against Microsoft in the so-called “gamers’ lawsuit” aiming to prevent the acquisition of Activision Blizzard.
The lawsuit has made headlines as a handful of self-identified “consumers of video games” represented by two law firms (Alioto Law Firm and Joseph Saveri Law Firm) are aiming to get the court to block the acquisition alleging that the deal would harm competition , reduce consumer choice, raise prices, and so forth.
In the United States, legislation (Section 7 of the Clayton Antitrust Act) allows private citizens to sue in antitrust cases, and that’s what happened here. The plaintiffs sought to get a preliminary injunction to stop the merger before the lawsuit reaches judgment. According to short filings provided by FOSS Patents blog founder Florian Mueller on social media, the motion has been denied.
The judge explains that even assuming that the plaintiffs could demonstrate that the acquisition may cause them “personal, irreparable” harm (which was not ruled on at this stage), they did not prove that harm could happen before the deal closes and a full decision on the merits of the lawsuit is taken.
Judge Jacqueline Scott Corley explains that there is nothing that suggests that Microsoft could make versions of call of duty that the plaintiffs already own somehow stop working, let alone that they would actually do so. It’s also not likely that Microsoft will make call of duty exclusive to its platforms before a full court ruling can be achieved. Plaintiffs speculated that Microsoft could violate written agreements about the future multiplatform nature of the call of duty frankness, but that’s insufficient to support the argument that it would cause them immediate irreparable harm.
In layman’s terms, the Judge believes that a preliminary injunction to block the merger is not warranted because, even assuming that the deal could possibly cause harm to competition or the plaintiffs, that’s unlikely to happen before the court reaches a full verdict. While this doesn’t completely sink the lawsuit, it renders it unable to block the deal before it happens.
It’s worth mentioning that, while the mainstream and enthusiast press has often defined this as a “gamers’ lawsuit,” it’s basically the usual class action instigated by law firms taking advantage of a few individuals in what’s essentially an antitrust version of ambulance chasing. That’s why we placed “gamers” between quotation marks in this article. Its frankly clumsy allegations really do not represent gamers as a group in any shape or form.
In the meanwhile, earlier this week the antitrust regulator of the European Union approved the deal including proposed remedies to level the competition playing field on the cloud market, which Microsoft agreed to. Yesterday we also learned that the deal was approved by the Chinese regulator, bringing the number of countries that cleared the acquisition to 37.
This leaves the British CMA isolated in its ruling against the deal, with the American FTC matching its opposition, but having to go through a legal process to actually be able to block it.
With several national antitrust authorities having already approved the deal. The saga continues and we’ll have to wait and see how things evolve with Microsoft and Activision have vowed to appeal against the CMA’s ruling. For now, the situation remains very much in flux.