Gamers’ Lawsuit Over $69 Billion Activision Deal Dismissed, Microsoft Emerges Victorious

Microsoft achieved the dismissal of a private consumer antitrust lawsuit on Monday regarding its proposed purchase of Activision Blizzard, the maker of Call of Duty, which is valued at $69 billion (approximately Rs. 5,70,300 crore). However, the plaintiffs have been granted a 20-day period to refine their legal challenge.

A federal judge in San Francisco stated that the lawsuit brought by a group of video game plaintiffs lacks the necessary evidence to support their claim that the acquisition would harm market competition.

“The plaintiffs’ general allegation that the merger may result in ‘higher prices, less innovation, less creativity, less consumer choice, decreased output, and other potential anticompetitive effects’ is inadequate,” emphasized US District Judge Jacqueline Corley. “They need to provide the ‘why’ and ‘how’ behind their claims.”

It is important to note that the judge’s decision does not impact the regulatory challenge brought by the US Federal Trade Commission (FTC) against this gaming industry deal, the largest-ever of its kind. Microsoft announced its bid last year and is also facing scrutiny from competition authorities in the EU and UK. Microsoft has consistently denied that the deal will have any negative impact on video game competition.

Private consumers have the right, under US antitrust law, to challenge mergers and acquisitions separately from government actions. An evidentiary hearing before the FTC has been scheduled for early August.

At the time of writing, Microsoft and its legal representatives had not yet responded to requests for comment.

According to Joseph Saveri, the lawyer representing the plaintiffs, they intend to submit a revised lawsuit that includes additional factual details to address the concerns highlighted by the judge.

As a result of Corley’s ruling, the previously planned hearing on issuing a preliminary injunction has been cancelled. A status hearing is now scheduled for April 12.

The case, officially known as Demartini v. Microsoft Corp, will take place at the US District Court, Northern District of California, and bears docket number 3:22-cv-08991.

Joseph Alioto of Alioto Law Firm and Joseph Saveri of Joseph Saveri Law Firm are representing the plaintiffs, while Rakesh Kilaru of Wilkinson Stekloff and Valarie Williams of Alston & Bird are representing Microsoft.

© Thomson Reuters 2023


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