The FTC has told PlayStation it has to reveal its third-party exclusivity deals
Sony’s request to quash a Microsoft subpoena has been mostly rejected
The Federal Trade Commission (FTC) has largely denied Sony‘s request to quash a Microsoft subpoena requesting that it divulge confidential documents.
Microsoft served Sony with the subpoena in January as part of its defence-building process ahead of an FTC lawsuit regarding its proposed acquisition of Activision Blizzard.
The subpoena included 45 separate requests for Sony documents, including copies of every third-party licensing agreement Sony has, and “all drafts of and communications regarding” SIE president Jim Ryan‘s declaration to the FTC.
Sony attempted to quash or limit the subpoena, arguing that a number of the requests were either irrelevant to the case or too time-consuming and expensive to carry out. However, in a newly filed order made by the FTC’s chief administrative law judge, most of Sony’s arguments have been rejected.
Most notable among Sony’s requests was that an order to produce a copy of “every content licensing agreement [it has] entered into with any third-party publisher between January 1, 2012 and present” be quashed, a request which has been denied.
Sony had argued that this information had no apparent value, and that compiling the documents would mean an “unduly burdensome” manual review of over 150,000 contract records to find which ones were relevant.
Microsoft’s argument, which the FTC has agreed with, was that since much of the Activision Blizzard acquisition case revolves around whether gaining access to its IP could result in Xbox-exclusive titles that could negatively impact competition, it was important to understand the full extent of Sony’s own exclusivity deals and “their effect on industry competitiveness”.
One request the FTC did grant Sony, however, was to limit the date range of documents being requested – as such, only documents dated from January 1, 2019 to the present date will be required.
Another Sony request that was denied was a request to not include the files being handled by certain Sony staff members, with Sony arguing that many of them were in Japanese and would therefore be more time-consuming and expensive to search.
The FTC rejected this, saying Sony couldn’t “persuasively explain why searching for and producing [these] files presents an undue burden”.
In December, the FTC announced plans to sue Microsoft in a bid to stop its $69 billion acquisition of Activision Blizzard, which the regulator argues would enable the company to “suppress competitors” to its Xbox console, subscription content and cloud gaming business.
Among other concerns, the FTC and Sony have expressed worries that the deal could significantly reduce PlayStation’s ability to compete, given that it would see Microsoft gain ownership of the Call of Duty series, which Sony has called “irreplaceable”.
In a bid to address regulatory concerns, Microsoft recently said it had offered Sony a 10-year, legally enforceable contract to make each new Call of Duty game available on PlayStation the same day it comes to Xbox.
The FTC said in January that there had been no “substantive” settlement talks with Microsoft over the proposed acquisition. If it goes to trial, the case will be judged during hearings set to take place in August 2023.