Microsoft lawyer Wilkinson again intervened. She knows that Judge Corley has identified the problem and MSFT essentially just has to point to the evidence or especially absence of evidence that validates Judge Corley's skepticism.

🧵48/X

— Florian Mueller (@FOSSpatents) June 29, 2023

Judge points out that people can use different devices and play with each other, so why are those devices not in the same market?

🧵50/X

— Florian Mueller (@FOSSpatents) June 29, 2023

Judge Corley: a high percentage of those who play CoD already own a PC.

FTC now says special gaming PC is not just any PC.

Judge: since pandemic etc. everybody has a (reasonably good) PC

🧵52/X

— Florian Mueller (@FOSSpatents) June 29, 2023

FTC says everything essentially becomes substitute if price goes through the roof.

(That obviously doesn't make sense. It's really just about consoles and gaming PCs here.)

🧵54/X

— Florian Mueller (@FOSSpatents) June 29, 2023

You really never want the judge to ask “Your opponent was looking at real data, what the heck were you looking at?” https://t.co/2vMbPeHkoy

— Richard Hoeg (@HoegLaw) June 29, 2023

FTC gets back to Hypothetical Monopolist Test.

Judge: sorry to go back, I get it if you have to buy it that makes perfect sense, but we're talking about where they already own it

🧵56/X

— Florian Mueller (@FOSSpatents) June 29, 2023

FTC says it has law and fact argument. Claims that its approach is the one under the law. Actually the HMT is not prescribed by the law or anything. Now talking about there being no evidence that people would buy one device instead of the other.

🧵58/X

— Florian Mueller (@FOSSpatents) June 29, 2023

MSFT's Wilkinson: we're not in a horizontal merger test, that's what the test is designed for. Here because it's a vertical merger ... it's about where they play the games -- the games, not the consoles, if they lose the games.

🧵60/X

— Florian Mueller (@FOSSpatents) June 29, 2023

Judge: let me then ask you about Nintendo... and trying to figure out why Xbox offers that Xbox S at that price point...?

🧵62/X

— Florian Mueller (@FOSSpatents) June 29, 2023

Judge: when they go to Best Buy and it's on the shelf and they got PS, Xbox, Nintendo Switch, and I look at it and can get this entry into the Gen9

FTC: in November 2020 priced the Xbox S it wasn't about matching Switch price but about getting users into their Gen9

🧵64/X

— Florian Mueller (@FOSSpatents) June 29, 2023

FTC says lots of things compete, but the legal focus must be on where competition matters. Where is the locus of competition where the effects of this deal will be felt.... not sufficient to say in lay term you can walk into the store and see it.

🧵66/X

— Florian Mueller (@FOSSpatents) June 29, 2023

FTC says price is one dimension of competition, but those devices don't do the same thing. Radically different form factors.

Judge Corley: connect to TV and play the same games, many of the same games

🧵68/X

— Florian Mueller (@FOSSpatents) June 29, 2023

Judge wants to know if there's evidence re. pricing.

Wilkinson that it's not true that they did not compare. And most important: Dr. Bailey's chart shows all the similar games available. The most popular games are on both.

🧵70/X

— Florian Mueller (@FOSSpatents) June 29, 2023

Judge Corley: I think there was evidence of titles exclusive to Nintendo.

Wilkinson: both PS and Nintendo have many more exclusives than the Xbox

FTC says Nintendo strategy is Zelda and Mario only on Nintendo

🧵72/X

— Florian Mueller (@FOSSpatents) June 29, 2023

Wilkinson pointing to ES games that are available on PS

ES6 that will come out later (she confused it for 16, probably because of FFXVI, but clear she means ES6) single-player

🧵74/X

— Florian Mueller (@FOSSpatents) June 29, 2023

FTC now wants to focus on incentives, claims it's not about multiplayer or non-multiplayer.

Judge Corley: those economic incentives include your brand. ... when the game is taken away from people's favorite platform there is reputational harm

🧵75/X

— Florian Mueller (@FOSSpatents) June 29, 2023

FTC: would there be reputational harm if CoD yanked from PS? 1. they would buy an Xbox to keep playing the game 2. that is a full foreclosure world, but what about a world where the best new Xmas character in CoD is only on Xbox?

🧵76/X

— Florian Mueller (@FOSSpatents) June 29, 2023

For the console theory it's a total bloodbath.

There are multiple ways to rule against the FTC and I believe we will see a decision that will throw out the console crap on at least 3 bases.

🧵77/X

— Florian Mueller (@FOSSpatents) June 29, 2023

Judge Corley: how big is the market of the people that care so much that they would switch and buy an Xbox they wouldn't otherwise buy?

FTC: it's not about just switching, the harm to the PS person and they have CoD and there's some new character and that's not an Xbox.

🧵79/X

— Florian Mueller (@FOSSpatents) June 29, 2023

Now FTC referring to Stadia. Google, very large and successful technology company, spent a lot of money, thought they did it right, just didn't have the right content.

🧵80/X

— Florian Mueller (@FOSSpatents) June 29, 2023

Wilkinson: it was Google's decision not to put their money into Stadia.

Judge Corley says we're still talking about console market, will later get to subscription and console market

🧵82/X

— Florian Mueller (@FOSSpatents) June 29, 2023

Judge Corley appears unprepared to ignore those actual and proposed agreements.

FTC now talking about who bears the burden. Says defendant has to explain why. But this is a Sec. 13(b) proceeding and it's just about government's prima facie (first look) case.

🧵84/X

— Florian Mueller (@FOSSpatents) June 29, 2023

FTC said they never heard from a 3rd party that signed the deals and said it was "magnificent".

Judge Corley reminds the FTC of the fact that Nvidia's Eisler said the deal saved them costs, enabled them to better compete with Microsoft. Isn't that procompetitive?

🧵86/X

— Florian Mueller (@FOSSpatents) June 29, 2023

Microsoft lawyer (not Wilkinson this time) can point to some merger cases where such contracts are considered. One a Commission (FTC) case, another an ALJ (also FTC) case. FTC now says that was different because chemical company offered selling a factor.

🧵88/X

— Florian Mueller (@FOSSpatents) June 29, 2023

MSFT: here it's not just that they're prepared to arbitrate an agreement (like in AT&T Time Warner) but here the agreements have been signed.

FTC now tries to dinstinguish those cases.

🧵90/X

— Florian Mueller (@FOSSpatents) June 29, 2023

I believe that was Mr. Sunshine's first active intervention in this case.

He now explains that this is a vertical case, the harm that's alleged is there would be no access to CoD, at core it's about access to CoD, therefore different type of remedy

🧵92/X

— Florian Mueller (@FOSSpatents) June 29, 2023

Wilkinson points out discovery is closed. We could have the whole case decided by the federal court.

Judge Corley joking about it because she apparently doesn't want to hold a full trial here about the same stuff

🧵94/X

— Florian Mueller (@FOSSpatents) June 29, 2023

Wilkinson pointing to testimony by Microsoft CEO Satya Nadella: that's the world in which we live because Sony is the market leader and has exclusives.

🧵96/X

— Florian Mueller (@FOSSpatents) June 29, 2023