PUBLIC

UNITED STATES OF AMERICA

FEDERAL TRADE COMMISSION

OFFICE OF ADMINISTRATIVE LAW JUDGES

__________________________________________

) 

In the Matter of ) 

) 

Microsoft Corp., ) 

 a corporation, and ) 

) Docket No. 9412 

Activision Blizzard, Inc., ) 

 a corporation, ) 

) 

Respondents. ) 

__________________________________________)

ORDER ON COMPLAINT COUNSEL’S MOTION TO COMPEL 

I.

On December 20, 2023, Federal Trade Commission (“FTC”) Complaint Counsel, 

pursuant to FTC Rule of Practice 3.38(a), 16 C.F.R. § 3.38(a), filed a motion to compel 

discovery from Respondents Microsoft Corp. (“Microsoft”) and Activision Blizzard, Inc. 

(“Activision”) (“Respondents”). As more fully discussed below, Complaint Counsel’s motion to 

compel (“Motion”) contends that, in refusing to provide certain documents and testimony 

sought by Complaint Counsel, Respondents have failed to comply with the order issued on 

October 26, 2023 (“October 26 Order”), which reopened fact discovery in this matter for certain 

limited purposes. Respondents filed an opposition to the Motion on January 2, 2024 

(“Opposition”), contending that the requested discovery is outside the scope of the discovery 

permitted under the October 26 Order. For the reasons set forth below, Complaint Counsel’s 

Motion is GRANTED IN PART and DENIED IN PART. 

II.

Procedural background 

On December 8, 2022, the FTC filed an administrative complaint seeking to enjoin 

Microsoft from acquiring Activision (the “Transaction”). Pursuant to the Scheduling Order 

issued on January 4, 2023, fact discovery closed on April 7, 2023. 

On June 12, 2023, the FTC filed a complaint in the United States District Court for the 

Northern District of California seeking to preliminarily enjoin the Transaction pending 

completion of the administrative proceeding. After an evidentiary hearing, on July 10, 2023, the 

district court denied the request for a preliminary injunction. FTC v. Microsoft Corp., 2023 U.S. 

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Dist. LEXIS 119001 (N.D. Cal. July 10, 2023). On July 12, 2023, the Commission appealed the 

district court’s decision. The United States Court of Appeals for the Ninth Circuit denied the 

Commission’s motion for an injunction to prevent the consummation of the merger pending 

appeal. FTC v. Microsoft Corp., 2023 U.S. App. LEXIS 17985 (9th Cir. July 14, 2023). 

On July 20, 2023, the Commission withdrew this matter from adjudication pursuant to 

16 C.F.R. § 3.26(c). See In re Microsoft Corp. & Activision Blizzard, Inc., 2023 WL 4733806 

(F.T.C. July 20, 2023). On September 26, 2023, the Commission returned this matter to 

adjudication and set the evidentiary hearing to commence twenty-one days after the Ninth 

Circuit issues its opinion on the appeal of the district court decision. See Order Returning Matter 

to Adjudication, In re Microsoft Corp. & Activision Blizzard, Inc., 2023 WL 6389836 (F.T.C. 

Sept. 26, 2023). On October 13, 2023, Microsoft and Activision closed the Transaction. 

Oral argument in the Ninth Circuit appeal was held on December 6, 2023. The appeal 

remains pending. 

October 26 Order 

On October 10, 2023, Complaint Counsel moved to reopen fact discovery for the 

purposes of obtaining discovery into certain agreements executed by Respondents after the close 

of discovery (“Motion to Reopen”). Specifically, Complaint Counsel requested an order 

allowing it “to serve requests for production of documents and data, interrogatories, notices of 

depositions, and subpoenas duces tecum and ad testificandum for the purpose of taking 

discovery relevant to the August 21, 2023 agreements by and among Ubisoft Entertainment SA, 

Microsoft Corp., and Activision Blizzard, Inc. and the July 15, 2023, agreement between 

Microsoft Corp. and Sony Interactive Entertainment LLC [‘SIE’].” Complaint Counsel’s 

Motion to Reopen, October 10, 2023, Proposed Order at 1-2.0F

1

 Complaint Counsel argued that 

the agreements were relevant and that because they were executed after the close of fact 

discovery, Complaint Counsel had not had adequate opportunity to obtain discovery regarding 

the agreements.

On October 20, 2023, Respondent Microsoft filed an opposition to the Motion to 

Reopen, in which Microsoft acknowledged its intention to introduce both the Ubisoft and Sony 

Agreements to rebut the Commission’s claim that Microsoft will withhold Activision content 

from competitors. Microsoft did not challenge the relevance of the agreements but opposed the 

amount of discovery proposed by Complaint Counsel. Specifically, Microsoft contended that 

Complaint Counsel’s discovery plan was duplicative and unduly burdensome, particularly with 

respect to the unlimited number of depositions, interrogatories, requests for production, and 

non-party discovery sought by Complaint Counsel. 

By Order issued on October 26, 2023, Complaint Counsel’s Motion to Reopen was 

granted in part. The October 26 Order determined that (1) the agreements are relevant within the 

1 Based on the record presented by the parties, Respondents’ agreement with Ubisoft, executed on August 21, 2023

(the “Ubisoft Agreement”), purports to transfer to Ubisoft the rights to stream Activision content over the cloud. 

Microsoft’s agreement with SIE, executed on July 15, 2023 (the “Sony Agreement”), purports to offer the video 

game series “Call of Duty” on PlayStation and PlayStation Plus (SIE’s video game subscription service). 

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meaning of the discovery rules because Microsoft “intends to offer the agreements into evidence 

at the evidentiary hearing to support its defense” (citing Rule 3.31(c)(1) (allowing discovery 

where relevant, inter alia, “to the defenses of any respondent”)); (2) Complaint Counsel was 

not, in the exercise of due diligence, able “to undertake discovery into the agreements prior to 

the discovery deadline because the agreements were not executed until months after the 

deadline” (citing In re Traffic Jam Events, 2021 WL 3465709, at *1 (F.T.C. July 23, 2021);1F

2

and (3) reopening discovery for the limited period requested would not risk delaying the 

evidentiary hearing, which is not scheduled to begin until twenty-one days after the disposition 

of the appeal before the Ninth Circuit. Notwithstanding a finding of good cause to allow 

discovery regarding the Sony and Ubisoft Agreements, the October 26 Order determined that 

the extent of the discovery methods proposed by Complaint Counsel was unduly extensive. See

16 C.F.R. § 3.31(c)(2) (“The frequency or extent of use of the discovery methods otherwise 

permitted under these rules shall be limited by the Administrative Law Judge” where the 

discovery sought is unreasonably cumulative or duplicative, or unduly burdensome.). 

Accordingly, the October 26 Order granted Complaint Counsel leave to serve discovery requests 

“for the purpose of taking discovery relevant to the Ubisoft Agreement and the Sony 

Agreement,” with specified limitations, including as to the number of discovery requests and 

depositions.2F

3

III.

On October 27, 2023, Complaint Counsel issued requests for production of documents to 

Microsoft and to Activision. On November 27, 2023, Complaint Counsel served notices for 

designee depositions designating certain topics for testimony. Respondents objected to certain 

of these discovery requests, and after several attempts to resolve all the disputes, the parties 

reached an impasse. This Motion followed. Rule 3.38(a), which governs motions to compel 

discovery, provides in pertinent part as follows: 

A party may apply by motion to the Administrative Law Judge for an order 

compelling disclosure or discovery, including a determination of the sufficiency 

of the answers or objections with respect to . . . a deposition under § 3.33, an 

interrogatory under § 3.35, or a production of documents or things or access for 

inspection or other purposes under § 3.37. . . . Unless the Administrative Law 

Judge determines that the objection is justified, the Administrative Law Judge 

shall order that an initial disclosure or an answer to any requests for admissions, 

documents, depositions, or interrogatories be served or disclosure otherwise be 

made.

16 C.F.R. § 3.38(a).

2 While Complaint Counsel took discovery of Microsoft’s December 2022 offer to SIE, Complaint Counsel had no 

opportunity to take discovery regarding the circumstances surrounding SIE’s decision in July 2023 to enter into an 

agreement with Microsoft. 

3 Specifically, the October 26 Order limited Complaint Counsel to serve: no more than six requests for production 

on each Respondent; no more than six interrogatories on Microsoft and three interrogatories on Activision; and no 

more than one notice for a Rule 3.33(c)(1) corporate deposition on each Respondent. The October 26 Order 

imposed a deadline for completion of the allowed discovery of eight weeks from the date of the Order.

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Pursuant to the October 26 Order, Complaint Counsel was authorized to seek discovery 

relevant to the Ubisoft Agreement and the Sony Agreement. Thus, the issue is whether 

Complaint Counsel’s requested discovery is within the limited scope of the October 26 Order. 

The discovery requested and Respondents’ objections are evaluated below.3F

4

Designation of corporate designee for Activision on deposition notice topics 1, 3, 4 

and 7 

 

Complaint Counsel’s notices of deposition to Microsoft and Activision request 

testimony on several common topics. Respondents object to producing a corporate designee 

from Activision to testify on four of these overlapping topics, contending that such testimony 

would be unreasonably duplicative to that of Microsoft: topic 1 (terms of the Ubisoft Agreement 

and how the agreement will operate in conjunction with other cloud streaming agreements and 

the Sony Agreement); topic 3 (how the payment provisions of the Ubisoft Agreement were 

determined and their anticipated effects); topic 4 (models, analyses, plans or assessments of 

impact or potential impact of the Ubisoft Agreement); and topic 7 (plans or potential plans by 

Respondents or Ubisoft to license Activision content for cloud streaming). Respondents further 

assert that Activision has no knowledge on the topics at issue, relying on a declaration from 

Activision’s Senior Vice President of Global Platform Strategy and Partner Relations, attached 

as Opposition Exhibit 2 (“Schnakenberg Decl.”). 

Activision deposition topics 1, 3, 4 and 7 appear nearly identical to Microsoft deposition 

topics 1, 3, 4 and 8. Compare Motion Ex. E with Motion Ex. D. Rule 3.31(c)(2) specifically 

directs the Administrative Law Judge to limit “[t]he frequency or extent of use of the discovery 

methods otherwise permitted under these rules” where it is determined, inter alia, that “[t]he 

discovery sought . . . is unreasonably cumulative or duplicative . . . .” 16 C.F.R. § 3.31(c)(2). 

However, the fact that the topics are substantively identical does not mean that the testimony of 

the two Respondents on those topics will necessarily be cumulative or duplicative. Respondents’ 

objection on these grounds is therefore without merit and is rejected.

Respondents’ assertion that Activision lacks relevant knowledge on topics 1, 3, and 7 

lacks sufficient support. The declaration upon which Respondents rely indicates that 

4 As a preliminary matter, Complaint Counsel argues that Respondents waived any objections to the corporate 

designee depositions by failing to file a motion to quash subpoena under Rule 3.34(c) within 10 days of service of 

the notices of deposition. This argument is without merit. Complaint Counsel sought to obtain the Microsoft and 

Activision depositions pursuant to Rule 3.33 notices of deposition (see Motion Exhibits D and E), which is the 

appropriate procedure to secure depositions from a party. Rule 3.34, in contrast, is the appropriate procedure to 

secure depositions or documents by subpoena and is the appropriate procedure to secure discovery from nonparties. Complaint Counsel does not allege, nor does the record show, any Rule 3.34 subpoenas issued to 

Respondents. Complaint Counsel relies on In re North Texas Specialty Physicians, 2003 WL 22936410 (F.T.C. 

Dec. 4, 2003), in which the respondent moved to quash deposition subpoenas served by complaint counsel on 

individual non-party physicians affiliated with the corporate respondent. See Respondents’ Motion for Protective 

Order, or in the Alternative, to Quash Depositions (Nov. 11, 2003), available at 

https://www.ftc.gov/sites/default/files/documents/cases/2003/11/031112ntspmoforprotecorder.pdf. The order in that 

case does not stand for the proposition that a party receiving a notice of deposition must file a motion to quash 

subpoena under Rule 3.34(c). 

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Activision’s knowledge may be limited in some respects but fails to establish that Activision has 

no relevant knowledge on all the matters encompassed by the topics at issue. As to topic 1, the 

declarant acknowledges general knowledge of the terms of the Ubisoft Agreement, if not some 

of the specifics, requested under topic 1. Schnakenberg Decl. ¶ 5. As to topic 3, the declaration’s 

assertion that Activision has “no insight” into how Microsoft determined the payment 

provisions of the Ubisoft Agreement or their anticipated effects is vague. Schnakenberg Decl. 

¶ 6. With respect to topic 7, regarding plans or potential plans to offer or license Activision 

content for cloud gaming, the declaration does not disclaim knowledge, but contends only that 

Microsoft and Ubisoft are “likely better-placed to answer those questions.” Schnakenberg Decl. 

¶ 9. Regarding topic 4, in contrast, the declaration clearly states that Activision did not model or 

otherwise assess the impact or potential impact of the Ubisoft Agreements. Schnakenberg Decl. 

¶ 7. This is sufficient to disclaim knowledge of matters encompassed by topic 4, and 

Respondents’ objection to topic 4 is sustained. 

Discovery regarding negotiations to extend termination date for the Transaction

(Request for Production of Documents No. 5 to Microsoft and No. 4 to Activision; Microsoft 

corporate designee deposition topic 9 and Activision corporate designee deposition topic 8). 

Complaint Counsel has requested discovery into the negotiations that resulted in 

Respondents’ agreement to extend the termination date for the Transaction from July 18, 2023 

to October 18, 2023. Respondents object, arguing that the extension of the termination date for 

the Transaction pursuant to Respondents’ merger agreement is outside the scope of the October 

26 Order which allowed discovery relevant to the Ubisoft and Sony Agreements, not the merger 

agreement. 

Complaint Counsel argues that the purpose of extending the termination date for the 

Transaction was so that Respondents could “negotiate additional purported remedies” to address 

the alleged anticompetitive harm from Microsoft’s acquisition of Activision and notes that 

Microsoft publicly announced that the purpose of the extension was to provide “ample time” to 

work through regulatory issues. Motion at 9; Motion Ex. J. Complaint Counsel contends that the 

Ubisoft Agreement would not exist absent the negotiations to extend the deadline, and therefore, 

discovery regarding the extension of the termination date is relevant to the Ubisoft Agreement. 

This strained attempt to shoehorn discovery into the merger agreement into the discovery into 

the Ubisoft Agreement allowed under the October 26 Order is unpersuasive and is rejected.4F

5

Respondents’ objections to Request for Production of Documents No. 5 to Microsoft and No. 4 

to Activision, and to Microsoft corporate designee deposition topic 9 and Activision corporate 

designee deposition topic 8 are sustained.

5

 Complaint Counsel contends that the October 26 Order encompassed discovery into the negotiations to extend the 

termination date for the Transaction because Complaint Counsel raised those negotiations in its argument as to the 

relevance of the Ubisoft Agreement, and that granting Complaint Counsel’s motion to reopen discovery “resolved” 

the question of the relevance of the extension negotiations in Complaint Counsel’s favor. This logic is fallacious. 

Regardless of the arguments Complaint Counsel may have made in support of its motion to reopen discovery, the 

motion was granted “in part” and clearly explained the bases for concluding that the Ubisoft and Sony Agreements 

were relevant. October 26 Order at 3-4. The extension of the termination date for the Transaction was not among 

them.

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Deposition testimony regarding alternative potential purchasers to Ubisoft or alternative 

Ubisoft Agreement terms (Microsoft and Activision corporate designee deposition topics 2(d) 

and 5) 

Complaint Counsel has requested deposition testimony related to terms that were 

proposed but not included in the final Ubisoft Agreement (topic 2(d)), and negotiations with or 

consideration of any potential purchasers, other than Ubisoft, of the rights to stream Activision’s 

games via cloud gaming (topic 5). Respondents object to providing testimony on both these 

topics, asserting that the October 26 Order granted only “limited” discovery into the Ubisoft 

Agreement and did not encompass discovery into proposed terms for the Ubisoft Agreement or 

consideration of alternative purchasers. These objections are rejected. While the October 26 

Order limited the frequency and use of the discovery methods to be used for the Ubisoft 

Agreement, the October 26 Order did not limit the scope of discovery otherwise authorized by 

the Rules of Practice. Pursuant to Rule 3.31(c)(1), “[p]arties may obtain discovery to the extent 

that it may be reasonably expected to yield information relevant to the allegations of the 

complaint, to the proposed relief, or to the defenses of any respondent.” 16 C.F.R. § 3.31(c)(1). 

Respondents have failed to articulate a valid basis for concluding that discovery into draft terms 

considered for the Ubisoft Agreement, or Respondents’ consideration of alternatives to an 

agreement with Ubisoft, are not relevant within the meaning of Rule 3.31(c)(1).

IV.

For the reasons set forth above, Complaint Counsel’s Motion to Compel is GRANTED 

IN PART and DENIED IN PART. Except as to Respondents’ objections that are sustained in 

this Order, Respondents shall provide the requested discovery. 

ORDERED: 

 D. Michael Chappell

 Chief Administrative Law Judge 

Date: January 5, 2024 

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