Charles River Associates expert, Dr. Elizabeth M. Bailey, provided expert testimony and economic analysis on behalf of Microsoft and Activision Blizzard in an evidentiary hearing on a motion for a preliminary injunction that was filed on June 12, 2023 by the Federal Trade Commission (FTC) in the U.S. District Court for the Northern District of California, San Francisco Division. Dr. Bailey was the only expert witness that presented live direct examination testimony during the hearing.
On July 10, 2023, after a five-day bench trial, U.S. District Court Judge Jacqueline Scott Corley denied the FTC’s motion for a preliminary injunction, ruling in favor of Microsoft and Activision Blizzard. Dr. Bailey’s testimony was cited by Judge Corley numerous times during closing arguments and in her written opinion.
In Federal Trade Commission v. Microsoft Corp. and Activision Blizzard Inc., the FTC sought a preliminary injunction to enjoin Microsoft’s $69 billion acquisition of Activision Blizzard pending the administrative action the FTC brought against the transaction in December 2022. The FTC argued that the proposed transaction raised vertical foreclosure concerns, alleging that Microsoft would have an increased incentive to withhold or degrade Activision’s video game content including Call of Duty from Microsoft’s Xbox rivals and would substantially lessen competition across multiple relevant product markets including high performance video game consoles, video game subscription services, and cloud gaming services sold into the United States in violation of Section 7 of the Clayton Act.
On July 14, 2023, the Ninth Circuit upheld Judge Corley’s decision, denying the FTC’s emergency motion for an injunction pending appeal. The FTC’s administrative challenge to the transaction before an FTC Administrative Law Judge and the Commission is pending.
Dr. Bailey was supported by a large CRA team including those noted below, along with many others. CRA’s team worked closely with attorneys representing Microsoft at Wilkinson Stekloff, including Beth Wilkinson, Rakesh Kilaru, Kieran Gostin, and Sarah Neuman, and at Weil Gotshal & Manges, including Michael Moiseyev and Megan Granger, as well as attorneys representing Activision Blizzard at Skadden Arps Slate Meagher & Flom, including Steve Sunshine, Julia York, Michael Sheerin, and Evan Kreiner.
