Interesting comments from the two guys on ResetEra, Idas specialising in antitrust and the other is an American lawyer.
KnowinStuff Said:
There is a reasonable prospect that this deal will have drawn sufficient regulator attention to exclusivity deals that some of those will draw antitrust scrutiny. The many statements in this thread to the contrary notwithstanding, exclusivity agreements, in certain contexts, absolutely can be violations of antitrust and monopolistic practices laws in major jurisdictions.
In the United States, for example, if the dominant player in a market leverages their position as the dominant player to make it harder for others to compete, in a manner that is harmful to consumers, that is an antitrust violation unless they enjoy OPEC style sovereign immunity, or some other sort of exceptional carveout. This doesn't require a merger to be a violation
Idas Said:
I think that this paragraph from MS’ opposition to Sony in the FTC case (from the document that was published today) could be potentially interesting:
Among other things, Microsoft is aware that PlayStation requires many third-party publishers to agree to exclusivity provisions, including preventing the publishers from putting their games on Xbox's multi-game subscription service. But Microsoft does not fully understand the extent of SIE's arrangements or how they impact the industry's competitiveness.
If the deal fails, could MS go after Sony‘s exclusive agreements from an antitrust perspective? After all, not every exclusivity provision is legal, specially if you are the dominant market power.
Back in August 2022, the first time that in this case we heard about those agreements through CADE in Brazil, I already shared how those exclusivity clauses cloud be problematic for Sony.
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Idas Thoughts on Acquisitions After
ABK is the biggest third party target that MS could try to acquire. If they succeed, and excluding platforms holders, everything else could be possible.
But I think that if they fail, lots of potential targets get automatically excluded. Any publisher with an IP that has: a long history as a franchise, lots of success with each new entry and relevant network effects, could be very problematic.
So, no Take-Two (GTA, NBK2), Electronic Arts (FIFA, Apex) or Epic (Fortnite). But I think that that could also affect Ubisoft (Ass Creed), Square Enix (Final Fantasy), Capcom (Resident Evil), Krafton (PUBG) and a few more. All those IPs are Top 15 worldwide from a revenue perspective.
Add to that that from now on cloud gaming is going to be a relevant market and MS is already the dominant power there. So, any new acquisition that adds relevant content and could potentially be foreclosed, can be problematic.
There would lots of medium and small targets for MS yet. But if the deal fails I think that lots of the big ones wouldn’t be a realistic option for MS.
Idas Thoughts on Sony Meeting Microsoft
Realistically speaking, the deal has a 20-25% chance of going through (some deal trackers are even less optimistic, giving it a 10-15%). If it goes through, it will be with extremely generous behavioural remedies in favor of third parties or with divestments (something very different to the the original plan, then).
That means that Sony is very close to get what they wished for: the deal being blocked or abandoned.
Therefore, if Sony is willing to accept an agreement NOW, there has to be a very good reason after how negative they have been about it.
