I don’t think it’s about picking and choosing. It’s about whether fair competition is at play and whether this merger will result in a monopoly.
That is the basis the FTC is blocking from. Yes both can survive with the status quo, but the status quo doesn’t mean it’s good for consumers.
FTC should not be blocking on the grounds of competition, they should be blocking if that leads to a monopoly which results in a lessening of competition and the exploitation of that monopoly.
Here's the issue, at least in the US. It doesn't matter if at some point in the future it might possibly result in a corporation becoming a monopoly. US laws do not prohibit something like that.
What US laws do prohibit is anything that can be proven to be harmful to consumers. Again people need to understand that laws in the US aren't meant to protect companies (IE - competition), they are there to protect the consumer.
As such, unless it can be shown that this merger
will result in harm to the consumer, then it is highly unlikely that the courts will move to block the merger.
Considering that even Sony believes that Microsoft have no intentions of removing COD from PlayStation, it's a huge uphill battle for the FTC to show that the merger is harmful to consumers.
Again, it
does not matter if it's potentially harmful to Sony or any other competitor. In a case such as this, it can't be stressed enough that it must be shown that consumers will be harmed. You can potentially make a case for a consumer being harmed if a company becomes a monopoly or supplants the dominant market player (in this case Sony) and thus becomes the dominant market player if you can show that the company's actions after becoming the dominant market player will harm the consumer. IE - a history of actions deemed harmful to consumers.
Exclusivity in and of itself is rarely deemed evidence of harm to the consumer as it's common market practice. It would have to be shown that this exclusivity has led to practices that are harmful to consumers. Did that position lead to pricing levels that were exceptionally higher than the competition (especially if it happens after attaining a position of market dominance). Did the position lead to the company exerting leveraging it's power over other players in the market such that it lead to price fixing? Did they leverage their position to prevent other companies from making deals with companies that the dominant player did not approve of (in other words, did they use their market power to assume defacto control over another company that they do not own)? Etc.
It's going to be hard to show harm to the consumer when Microsoft's current actions and actions in the recent past have all been consumer focused. IE - they attempted to keep pricing levels lower even when their competition raised prices (games at 70 on PS but 60 on Xbox, holding off on increasing the price of their console for as long as possible, being the first console maker to bring their games to a non-console audience, allowing some of their games to remain multiplatform, etc.).
Sure, the FTC can show that MS has a history of making
some IP exclusive after they were multiplatform. But that happens in the console industry regardless of whether or not X company owns Y IP. For example, Street Fighter V still hasn't appeared on Xbox consoles. Was it an exclusivity deal with Sony or was it done with no involvement from Sony (one reason why MS sought any Sony documents relating to deals with other companies).
Just like people need to keep in mind the basis of the rules, regulations and laws in the UK when looking at the CMA ruling, people really should try to understand rules, regulations and laws in the US WRT mergers and acquisitions.
To repeat, they are not there for the government to enforce a certain level of competition between businesses or corporations. They aren't there to protect smaller companies from larger companies. The laws regulation these things are very specifically meant to address potential harm to consumers.
As such, WRT the courts, it is all about the FTC needing to show that Microsoft's acquisition of ABK would lead to demonstrable harm to the consumers in the US. Again, the key being the US as the laws and the courts have no jurisdiction outside of the US.
So, yes, showing that MS
could become a monopoly even though they are the minority competitor in the console market could be used as a strategy to show harm to the consumer, if they can show that with a dominant market position, MS would in turn leverage that in a way that can be shown to be harmful to consumers. That's the hard part as MS has been careful for many years now to not do things that would be deemed harmful to consumers in the US.
Regards,
SB
