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 UNITED STATES OF AMERICA

 FEDERAL TRADE COMMISSION 

In the Matter of: )

 MICROSOFT CORP. )

 a corporation, )

 and ) Docket No. 9412

 ACTIVISION BLIZZARD, INC., )

 a corporation, )

 Respondents. )

 INITIAL PREHEARING TELEPHONIC SCHEDULING CONFERENCE

 JANUARY 3, 2023

 3:00 P.M.

 BEFORE THE HONORABLE D. MICHAEL CHAPPELL

 Administrative Law Judge 

Reported by: Susanne Bergling, RMR-CLR 
2 

Initial Prehearing Scheduling Conference 

Microsoft and Activision Blizzard 1/3/2023 

1 APPEARANCES: 

2 

3 ON BEHALF OF THE FEDERAL TRADE COMMISSION: 

4 JAMES H. WEINGARTEN, ESQ. 

5 CEM AKLEMAN, ESQ. 

6 MEREDITH LEVERT, ESQ. 

7 Federal Trade Commission 

8 400 Seventh Street, S.W. 

9 Washington, D.C. 20024 

10 jweingarten@ftc.gov 

11 

12 

13 ON BEHALF OF RESPONDENT MICROSOFT: 

14 BETH WILKINSON, ESQ. 

15 RAKESH N. KILARU, ESQ. 

16 ALYSHA BOHANON, ESQ. 

17 Wilkinson Stekloff LLP 

18 2001 M Street, N.W., 10th Floor 

19 Washington, D.C. 20036 

20 (202) 847-4000 

21 bwilkinson@wilkinsonstekloff.com 

22 

23 and 

24 

25 

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1 MEGAN A. GRANGER, ESQ. 

2 Weil Gotshal & Manges, LLP 

3 2001 M Street, N.W., Suite 600 

4 Washington, D.C. 20036 

5 (202) 682-7026 

6 megan.granger@weil.com 

7 

8 

9 ON BEHALF OF RESPONDENT ACTIVISION BLIZZARD, INC.: 

10 STEVEN C. SUNSHINE, ESQ. 

11 JULIA YORK, ESQ. 

12 Skadden, Arps, Slate, Meagher & Flom, LLP 

13 1440 New York Avenue, N.W. 

14 Washington, D.C. 20005 

15 (202) 271-7860 

16 steve.sunshine@skadden.com 

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18 

19 

20 

21 

22 

23 

24 

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Initial Prehearing Scheduling Conference 

Microsoft and Activision Blizzard 1/3/2023 

1 P R O C E E D I N G S 

2 - - - - -

3 JUDGE CHAPPELL: All right, we are on the record. 

4 This is the prehearing scheduling conference in Docket 

5 Number 9412 in the matter of Microsoft Corp. and 

6 Activision Blizzard, Inc. 

7 I'm Judge Chappell. This scheduling conference 

8 is being conducted telephonically and is being 

9 transcribed by a court reporter who is on the line with 

10 us. 

11 I will say that we have had an unexpected turnout 

12 of people calling in to monitor. The operator has 

13 doubled the number of lines available, and anyone else 

14 who's tried to get in, we have done all we can at this 

15 time. 

16 I've chosen to conduct this scheduling conference 

17 telephonically rather than via Zoom video. This choice 

18 will save time and resources, as we can avoid engaging 

19 an entire video trial team for a short scheduling 

20 conference which is merely procedural and is not 

21 evidentiary. 

22 Could the court reporter state your name for the 

23 record. 

24 THE REPORTER: Susanne Bergling. 

25 JUDGE CHAPPELL: Also, before you speak on the 

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Initial Prehearing Scheduling Conference 

Microsoft and Activision Blizzard 1/3/2023 

1 call, I need you to identify yourself for the court 

2 reporter. 

3 I will now take appearances of those designated 

4 to speak for the parties, and I need you to also 

5 identify who is on the call for your client or party. 

6 We'll start with the Government and Complaint Counsel. 

7 MR. WEINGARTEN: Good afternoon, Your Honor, and 

8 Happy New Year. This is James Weingarten for Complaint 

9 Counsel. With me on the line are Cem Akleman and 

10 Meredith Levert. 

11 JUDGE CHAPPELL: Thank you, and a Happy New Year 

12 to everyone as well. 

13 Next -- and did you indicate and identify 

14 everyone who was on the call, sir? 

15 MR. WEINGARTEN: Yes, sir. 

16 JUDGE CHAPPELL: All right. 

17 And for Respondent Microsoft Corp? 

18 I don't hear anything. Do we have an attorney 

19 for Microsoft Corporation? Perhaps the phone's muted? 

20 MS. GROSS: Beth Wilkinson, she was on. 

21 OPERATOR: I'm sorry, what name was that? 

22 MS. GROSS: It was Beth Wilkinson. She was on 

23 earlier. 

24 OPERATOR: She was. Let me check her line. I 

25 can dial out to her. She did drop. I'll call her back. 

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1 JUDGE CHAPPELL: Please do so. 

2 (Pause in the proceedings.) 

3 MS. WILKINSON: Judge Chappell, this is Beth 

4 Wilkinson. 

5 JUDGE CHAPPELL: Good morning. You haven't 

6 missed anything material. I was just taking the 

7 appearances of the parties. 

8 So I will now go to Respondent counsel for 

9 Microsoft Corporation. 

10 MS. WILKINSON: Thank you, Judge Chappell. Beth 

11 Wilkinson for Microsoft Xbox. 

12 JUDGE CHAPPELL: And for Respondent Activision? 

13 MR. SUNSHINE: Good afternoon, Judge. Steve 

14 Sunshine, Skadden Arps, for Respondent Activision. 

15 JUDGE CHAPPELL: Thank you. 

16 Now, anyone else on the call with either of you, 

17 if you can identify the people on the call with you on 

18 your end --

19 MS. WILKINSON: Yes, Your Honor --

20 JUDGE CHAPPELL: -- on your end, not the entire 

21 call, of course. 

22 MS. WILKINSON: Yes, Your Honor. I will have 

23 them introduce themselves. 

24 MR. KILARU: Rakesh Kilaru, also behalf of 

25 Microsoft. 

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1 MS. BOHANON: Alysha Bohanon on behalf Microsoft. 

2 MS. GRANGER: Megan Granger on behalf of 

3 Microsoft. 

4 MS. YORK: And Julia York from Skadden on behalf 

5 of Activision. 

6 JUDGE CHAPPELL: All right. And now everyone's 

7 identified on that side of the call? 

8 MS. WILKINSON: Yes, Your Honor. 

9 JUDGE CHAPPELL: All right. 

10 Let me first say thank you to the AT&T operator 

11 who was able to handle this mess expertly and quickly. 

12 I appreciate it. Thank you very much, ma'am. 

13 OPERATOR: You're welcome. 

14 JUDGE CHAPPELL: Also on the line with me are my 

15 attorney-advisors. In addition, the press and the 

16 public have access to this scheduling conference through 

17 a toll-free telephone connection that allows them to 

18 call in. 

19 As I stated earlier, we have had many more 

20 call-ins than we expected. The operator has doubled the 

21 number of lines available, and we don't have the ability 

22 to add any more lines, so a lot of people can't get in, 

23 but the system is full at this point. 

24 Because other people are listening in, you are 

25 cautioned not to reveal any confidential information. 

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1 I have a question for the Government. As far as 

2 I know, there is no parallel proceeding pending before 

3 any U.S. District Court. Is there any update on that? 

4 MR. WEINGARTEN: This is James Weingarten with 

5 the Government, Your Honor. You are correct, sir, there 

6 is no further update, no parallel proceeding. 

7 JUDGE CHAPPELL: And is there any plan for one? 

8 MR. WEINGARTEN: Not at this time, Your Honor, 

9 only if it were to become necessary at some future date. 

10 JUDGE CHAPPELL: All right. 

11 The parties were provided a proposed scheduling 

12 order in advance of this conference. The parties have 

13 jointly proposed several changes to dates and to 

14 additional provisions in the scheduling order. These 

15 changes are acceptable and will be incorporated in a 

16 scheduling order which I will issue shortly. 

17 Let me ask about settlement discussions. I trust 

18 the parties have attempted to settle this matter. Does 

19 the Government want to go first and provide the status 

20 of settlement discussions? 

21 MR. WEINGARTEN: Yes, Your Honor. This is, 

22 again, James Weingarten with the Government. 

23 Leadership for the Bureau of Competition has 

24 directed Respondents to engage with staff directly. We 

25 are always open to any remedy or settlement proposal 

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1 either in litigation or before litigation. There are no 

2 substantive conversations happening at this time. 

3 JUDGE CHAPPELL: When you say to engage staff 

4 directly, who do you mean by "staff"? 

5 MR. WEINGARTEN: Me, Your Honor. 

6 JUDGE CHAPPELL: Okay. 

7 Any update on settlement or other information 

8 from Respondents' side? 

9 MS. WILKINSON: Yes, Your Honor. This is Beth 

10 Wilkinson on behalf of Xbox. 

11 Part of the reason we were able to engage with 

12 Complaint Counsel and come up with a more expedited 

13 schedule is, as you may know, we are undergoing -- the 

14 deal is undergoing review over in Europe and in the 

15 United Kingdom, and we're hoping that that will be 

16 resolved, and if there are remedies that are 

17 appropriate, that we can come back to Mr. Weingarten and 

18 the FTC staff to talk about a resolution. 

19 If not, as he was suggesting, and we have to 

20 go -- the deal then could go forward and could close, we 

21 assume that the FTC would make the decision to go to 

22 Federal Court, and that's why we wanted to put -- kind 

23 of front-load the discovery in case they were to move 

24 it, because we have a termination date of July 18th, 

25 2023. 

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Initial Prehearing Scheduling Conference 

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1 So we kind of are preparing for all options, 

2 either resolution, if we can, which would be ideal, or a 

3 trial in front of you, which, of course, is fine and up 

4 to the FTC, or Federal Court. 

5 JUDGE CHAPPELL: Now, did I hear you mention the 

6 United Kingdom and the European Union, one or both? 

7 MS. WILKINSON: Both, Your Honor. There's a --

8 as you know, there's the EC, the European Commission, 

9 and then the UK now has the CMA, and they are reviewing 

10 the deal separately, at the same time right now, and 

11 our clients are engaging with both regulators. 

12 There are also other regulators around the world 

13 that are looking at this deal, and we've received 

14 clearance in some jurisdictions, and we hope to receive, 

15 you know, clearance in all jurisdictions sometime over 

16 the next few months. 

17 JUDGE CHAPPELL: All right. And no one in the UK 

18 Commission or the European Commission, no one has issued 

19 an edict to block anything at this point. Is that 

20 correct? 

21 MS. WILKINSON: That's correct, Your Honor. 

22 JUDGE CHAPPELL: All right, thank you. 

23 Well, as everyone was aware, this was going to be 

24 a very brief conference because it's merely procedural. 

25 The big part of this was to get the scheduling order 

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Initial Prehearing Scheduling Conference 

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1 confirmed, which we've done. 

2 Is there anything further from the Government 

3 before I conclude the hearing? 

4 MR. WEINGARTEN: This is James Weingarten. 

5 Nothing further. Thank you, Your Honor. 

6 JUDGE CHAPPELL: Anything further from Respondent 

7 Microsoft Corporation? 

8 MS. WILKINSON: No, Your Honor. 

9 JUDGE CHAPPELL: And from -- anything further 

10 from Respondent Activision Blizzard, Inc.? 

11 MR. SUNSHINE: Nothing, Your Honor. Thank you 

12 very much. 

13 JUDGE CHAPPELL: All right. 

14 Hearing nothing further, we are adjourned. Thank 

15 you, all. 

16 (Whereupon, at 3:21 p.m., the hearing was 

17 concluded.) 

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Initial Prehearing Scheduling Conference

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1

 CERTIFICATE OF REPORTER

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 I, Susanne Bergling, do hereby certify that the

5 foregoing proceedings were recorded by me via stenotype

6 and reduced to typewriting under my supervision; that I

7 am neither counsel for, related to, nor employed by any

8 of the parties to the action in which these proceedings

9 were transcribed; and further, that I am not a relative

10 or employee of any attorney or counsel employed by the

11 parties hereto, nor financially or otherwise interested

12 in the outcome of the action.

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17

 SUSANNE BERGLING, RMR-CRR-CLR

18

 1/4/2023 

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