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Jun 20, 2023 - Technology

Lawyers: Email proves Microsoft's Activision bid is designed to eliminate PlayStation

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Plaintiff's filing in appeal of Dante DeMartini, et al. v. Microsoft Corporation. Screenshot: Axios

As Microsoft pushes back against the Federal Trade Commission’s attempt to block its proposed Activision bid, a parallel legal battle is adding an intriguing twist.

Driving the news: In an appeal to the U.S. 9th Circuit Court, lawyers representing a group of gamers suing to block the deal over antitrust concerns point to a purported internal Microsoft email they describe as “uncontroverted evidence that Microsoft had the intention to put its main competition, the Sony PlayStation, out of the market.”

  • The contents of the message are redacted, but the plaintiffs say it was sent by Microsoft’s head of Xbox game studios (Matt Booty) to Microsoft’s chief financial officer for Xbox (Tim Stuart).
  • The passage appears to be from Exhibit K, a sealed document that the gamers’ lawyers and Microsoft’s attorneys have been arguing over.
  • In legal documents, Microsoft characterized the email as an “internal exchange” that should remain sealed; a Microsoft rep declined to comment further.
  • Microsoft's lawyers have said the document has had no bearing on the court’s decisions.

Yes, but: A Microsoft representative told Axios that the company cannot legally share the email's contents, but that it was sent by Booty in 2019.

  • That would mean that whatever Booty may have said about Xbox trying to beat PlayStation preceded the company's early 2022 bid to buy Activision Blizzard.

Be smart: This suit is a side drama to the FTC’s antitrust case against Microsoft, which is speeding toward more hearings this week.

  • Judge Jacqueline Corley, the same justice overseeing the initial gamer suit, recently agreed to put a short-term hold on the merger — but Microsoft fears that any delay could jeopardize the deal.

What's next: Microsoft and the FTC both shared their witness lists today for their case's hearings this month.

  • The list includes Microsoft CEO Satya Nadella, PlayStation chief Jim Ryan, Bethesda head of publishing Pete Hines, Activision CEO Bobby Kotick and numerous Xbox executives, including Booty and Stuart.

Editor's note: This story has been updated with additional comment from Microsoft.

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