4 ms·

Why do you think the Activision merger is bad? And how could the FTC change their case to win?

worrycue 3y ago
Not the person you were replying to. Consoles rely on 3rd party support to be successful. Microsoft just bought out one of the largest 3rd party publishers in the gaming industry. By failing to stop it, it's signaling to other players in the console space that they shouldn't bother continuing in the business as there is no way they can compete with the spending power of Microsoft - whose market cap is >14x both their competitors combined.
jamesliudotcc 3y ago
Khan and the "Neo-Brandeisians" have a legal theory, which to oversimplify, holds that the true meaning of the antitrust statutes is "big business is antithetical to democracy, and so the federal government is empowered to stop businesses getting bigger." The current precedent in antitrust holds that antitrust means that the government is only empowered to act when bigness results in consumer harm, mostly in the form of higher prices. Note, legal theories are not like scientific theories! Courts can be influenced by legal theories. And in fact, the current mainstream in antitrust, which focuses on consumer harm, started as a legal theory propounded by the likes of Bork (yes, that Bork) and Posner. Because it has been adopted by the courts, especially by the Supreme Court, it is the precedent. Trial courts are bound to follow the precedent! So, of course the legal strategy was bound to lead to losses in court. You can win under this strategy, but only in the Supreme Court, which isn't bound to follow the precedent, but mostly prefers to follow its own precedent. Getting to the Supreme court typically takes years, and it requires the Supreme Court wanting to take the case. We'll see in the next stage if this was the strategy. If I were pursuing this strategy, I would say so. Then the losses wouldn't hurt morale!
- xp84 3y ago
  > legal theories are not like scientific theories! Good advice. Because unlike a scientific theory no one can really prove (or disprove) her opinion about what policy should be applied to antitrust issues. It doesn’t matter in politics who’s “right” in this way, just who can convince others that they’re right. (the “right” people too)
- cafard 3y ago
  What were the precedents before Bork and Posner?
  - jamesliudotcc 3y ago
    More Brandeisian. Hence the name, Neo-Brandeisian. But those precedents were overturned by the Supreme Court. Only the Supreme Court can overturn the precedents. But since it is interpretation of statutes, Congress can change the statutes.
- kaycey2022 3y ago
  Big will not be a danger to democracy if money weren't free speech (or something to that effect)
- mimd 3y ago
  I suspect that's her goal, even if implicit, to take it to the supreme court to get her precedent. It's a poor strategy though, and shows a fundamental misunderstanding of her odds and position. The emphasis on the supreme court tends to screw people up. A "vanity" as it were. She was chosen as a celebrity on the issue, due to her paper and outspokenness, not her technically prowess. A fatal flaw with most political appointees. I suspect some of her supporters in the admin likely hoped she would be less controlling on cases but be dogged in pursuit. But perhaps others thought the opposite. An incompetent zealot, can be a perfect buffer. The Activision case is a fiasco, it's huge at 75b, there's lots of nice evidence, etc. It upends her core selling points.
- tptacek 3y ago
  Her strategy is to take a new, far more restrictive theory of antitrust to this Supreme Court?
  - xp84 3y ago
    Yeah this sounds like she’s more blinded by zeal than I even thought.
brucethemoose2 3y ago
In addition to what others said, PS5-tier consoles with custom silicon are extremely expensive to develop. Sony needs a critical mass of 1st/3rd party games for future competitive PlayStations to even exist. Otherwise, Sony has to bow out, and Microsoft has a pseudo monopoly, which harms US consumers and the games industry. Activision is a huge chunk of the oxygen Sony's Playstation needs to breathe, just like Zenimax was. This is tricky in court because Microsoft can wave their hands and point to "competing" platforms like iOS, Nintendo, Steam and such. Microsoft's argument sounds very convincing to a judge who has never touched an Xbox controller.
taeric 3y ago
Two questions there. On the first, for a lot of us, the fact that you didn't name the other party of the merger is exactly why we suspect it. Microsoft has a pretty littered history of anti competitive tactics. An even more spotted history of acquiring things to let them die. (To be fair, I don't think there are that many mergers that work out in the mid to long term?) So, the fact that a lot of the legal decision came down to taking Microsoft's word that they wouldn't be Microsoft is concerning on its own. On the second? I confess I didn't follow the arguments they were making, all told. Love to see analysis here.

Not the person you were replying to. Consoles rely on 3rd party support to be successful. Microsoft just bought out one of the largest 3rd party publishers in the gaming industry. By failing to stop it, it's signaling to other players in the console space that they shouldn't bother continuing in the business as there is no way they can compete with the spending power of Microsoft - whose market cap is >14x both their competitors combined.

jamesliudotcc 3y ago

Khan and the "Neo-Brandeisians" have a legal theory, which to oversimplify, holds that the true meaning of the antitrust statutes is "big business is antithetical to democracy, and so the federal government is empowered to stop businesses getting bigger." The current precedent in antitrust holds that antitrust means that the government is only empowered to act when bigness results in consumer harm, mostly in the form of higher prices. Note, legal theories are not like scientific theories! Courts can be influenced by legal theories. And in fact, the current mainstream in antitrust, which focuses on consumer harm, started as a legal theory propounded by the likes of Bork (yes, that Bork) and Posner. Because it has been adopted by the courts, especially by the Supreme Court, it is the precedent. Trial courts are bound to follow the precedent! So, of course the legal strategy was bound to lead to losses in court. You can win under this strategy, but only in the Supreme Court, which isn't bound to follow the precedent, but mostly prefers to follow its own precedent. Getting to the Supreme court typically takes years, and it requires the Supreme Court wanting to take the case. We'll see in the next stage if this was the strategy. If I were pursuing this strategy, I would say so. Then the losses wouldn't hurt morale!

xp84 3y ago
> legal theories are not like scientific theories! Good advice. Because unlike a scientific theory no one can really prove (or disprove) her opinion about what policy should be applied to antitrust issues. It doesn’t matter in politics who’s “right” in this way, just who can convince others that they’re right. (the “right” people too)
cafard 3y ago
What were the precedents before Bork and Posner?
- jamesliudotcc 3y ago
  More Brandeisian. Hence the name, Neo-Brandeisian. But those precedents were overturned by the Supreme Court. Only the Supreme Court can overturn the precedents. But since it is interpretation of statutes, Congress can change the statutes.
kaycey2022 3y ago
Big will not be a danger to democracy if money weren't free speech (or something to that effect)
mimd 3y ago
I suspect that's her goal, even if implicit, to take it to the supreme court to get her precedent. It's a poor strategy though, and shows a fundamental misunderstanding of her odds and position. The emphasis on the supreme court tends to screw people up. A "vanity" as it were. She was chosen as a celebrity on the issue, due to her paper and outspokenness, not her technically prowess. A fatal flaw with most political appointees. I suspect some of her supporters in the admin likely hoped she would be less controlling on cases but be dogged in pursuit. But perhaps others thought the opposite. An incompetent zealot, can be a perfect buffer. The Activision case is a fiasco, it's huge at 75b, there's lots of nice evidence, etc. It upends her core selling points.
tptacek 3y ago
Her strategy is to take a new, far more restrictive theory of antitrust to this Supreme Court?
- xp84 3y ago
  Yeah this sounds like she’s more blinded by zeal than I even thought.

brucethemoose2 3y ago

In addition to what others said, PS5-tier consoles with custom silicon are extremely expensive to develop. Sony needs a critical mass of 1st/3rd party games for future competitive PlayStations to even exist. Otherwise, Sony has to bow out, and Microsoft has a pseudo monopoly, which harms US consumers and the games industry. Activision is a huge chunk of the oxygen Sony's Playstation needs to breathe, just like Zenimax was. This is tricky in court because Microsoft can wave their hands and point to "competing" platforms like iOS, Nintendo, Steam and such. Microsoft's argument sounds very convincing to a judge who has never touched an Xbox controller.

taeric 3y ago

Two questions there. On the first, for a lot of us, the fact that you didn't name the other party of the merger is exactly why we suspect it. Microsoft has a pretty littered history of anti competitive tactics. An even more spotted history of acquiring things to let them die. (To be fair, I don't think there are that many mergers that work out in the mid to long term?) So, the fact that a lot of the legal decision came down to taking Microsoft's word that they wouldn't be Microsoft is concerning on its own. On the second? I confess I didn't follow the arguments they were making, all told. Love to see analysis here.