Xbox FTC Trial Day 5: Does Xbox Really Have It in the Bag?

While I was sitting in the press room yesterday, writing my thoughts on yesterday’s proceedings in the FTC v. Microsoft hearing over the Activision acquisition, I met courtroom artist Vicki Behringer. She was just putting the finishing touches on a few lovely watercolors of the day’s proceedings.

Most of her pieces include some angle of Judge Jacqueline Scott Corley listening intently to whoever is speaking, focused and pensive. But one of Behringer’s paintings stood out in particular. It depicts a specific moment in the trial where Microsoft CEO Satya Nadella and Judge Jacqueline Scott Corley discovered they both enjoyed Candy Crush. Judge Corley is smiling warmly at Nadella, clearly grounded in something personal and familiar amid a trial entirely about a gaming world she largely doesn’t participate in.

I love this painting of Behringer’s for the same reasons I enjoyed watching Judge Corley over the last two weeks as she presided over FTC v. Microsoft. Judge Corley was warm and personable throughout the entire trial, professional at every step while cracking exactly the right amount of jokes to keep the atmosphere relaxed and human. But what I enjoyed the most was her intensity in listening and absorbing every detail of the, frankly, complex and bizarre world of gaming she was being presented with. It’s easy to gloss over how convoluted the industry is when you spend all day, every day, inside of it. But for Corley, one must assume most of the last two weeks was brand new, and often bizarre. And yet her attentiveness was impeccable. She asked great questions. In the end, she largely seemed to get it – though I still wish someone had explained to her properly that absolutely no one really knows or cares what numbered “Gen” the Nintendo Switch is. Alas.

But while I can say for certain that Judge Corley was warm, funny, attentive, and curious, what I cannot say – what no one can say – is what she ultimately made of this entire affair. As I write this, analysts and fans alike are taking to blogs and social media to predict whether or not the FTC will get its injunction. But while I certainly think one side made a far better argument throughout this trial, it’s critical to remember that court cases are not sporting events, nor are they E3 presentations. The winner isn’t the person who scores the most points or has the coolest presentation. Microsoft lawyer Beth Wilkinson can deliver zinger after zinger on James Weingarten, and it might not matter a bit.

All that matters is what Judge Jacqueline Scott Corley thinks. So let’s see what we can make of her on the last day of the trial.

Proving the Hypotheticals

Boy oh boy. You know it’s going to be good when the judge in your trial tells the lawyers to “have an engagement” in their closing arguments, then cautions them not to let it get “chaotic”.

Today’s closing arguments gave an interesting look at where Judge Corley’s head was at, largely because she insisted from the word “go” on spending the time getting answers to her many questions about games, services, consoles, and this case. If you want to be really technical about it, what we witnessed was about three hours of the FTC giving its own closing arguments interrupted almost constantly by Judge Corley and, to a lesser extent, Wilkinson, but it was really more of a formal debate and discussion between all three.

We’re recapping the closing arguments elsewhere, but one key element that stood out in the first hour or so of argument was a distinctive difference in how Judge Corley and FTC lawyer James Weingarten are approaching the Call of Duty problem. Many of Weingarten’s arguments revolved around hypotheticals and theoreticals, while Corley repeatedly asked for grounded, real-world scenarios.

For instance, where Weingarten was intent on demonstrating that a hypothetical PlayStation customer would be forced to switch to Xbox when faced with a lack of Call of Duty on their console, Judge Corley badly wanted to bring the arguments into the real world, where people already have Call of Duty-capable PCs sitting in their houses and might just play on those. In another example, Corley pointed out that a customer in Best Buy would be looking at an Xbox Series X, S, PlayStation 5, and a Nintendo Switch on the shelf together and choosing which of them to buy, conceivably making the Switch part of the “relevant market” for competition. But Weingarten disagreed – lots of things are competing all the time, he said, but his job is specifically to define where market effects could conceivably be felt. A third example, which took up an enormous amount of time, involved the FTC’s expert witness suggesting a mysterious number of PlayStation customers that would switch to Xbox if Call of Duty were made exclusive, a number he seemed to derive from nowhere in particular, and which multiple FTC lawyers seemed incapable of explaining.

What was striking about this back and forth between Weingarten and Judge Corley (and occasionally Wilkinson, who really made the FTC look silly when she explained their own graphs to them) was that Weingarten never backed down from his position in the hypothetical space. At the start of the closing remarks, Judge Corley didn’t seem fully convinced – she repeatedly asked for data and real-world examples Weingarten simply didn’t have.

But I think we have to entertain the possibility that Weingarten may have moved her a bit on this point, and if he did, it’s thanks to another big theme that resounded throughout the closing remarks: Weingarten’s argument that the burden of proof in this case isn’t on him to begin with.

Heavy Burdens

In his opening remarks, James Weingarten for the FTC stated the parties weren’t actually here to decide whether or not the Microsoft-Activision merger happens or not. Rather, he claimed they were there to decide whether or not the merger should be put on pause long enough for the FTC to finish evaluating the antitrust merits fully in a planned August trial, rather than having to do so retroactively when the deal was already locked in.

At the time, no one challenged Weingarten on this, but in the closing remarks, he suddenly found himself challenged on it. And frankly, it seems like a lot of Weingarten’s arguments hinge on Corley being on his side here. The FTC’s dealing in hypotheticals and theoreticals works pretty well as a measure to point out that a prospective Microsoft-Activision deal leaves a lot of unanswered questions about its potential merits and harms. If the goal was, as he says, to “raise substantial questions” and make it clear the need for further review outweighed Microsoft’s need to get the deal done on time, Weingarten probably managed it despite a fairly weak showing from the FTC.

“That is their job, to figure this out.”

If Weingarten is right, though, that would put the burden on Microsoft to prove there was unquestionably nothing wrong with its pending acquisition, and Wilkinson wasn’t having that. Microsoft’s lawyers rebutted that the burden has always been with the FTC to establish it had a case to begin with, and that it’s pretty ridiculous to drag Microsoft to court like this only to be unable to define why they’re there at all. “That is their job, to figure this out,” Wilkinson rebutted. “To say you want to stop a $69 billion transaction, but you can’t figure out what the harm would be?”

For a while, Judge Corley seemed to be on Microsoft’s side here. Later in the arguments, she pointed out the FTC had already “won” in a sense, by getting Microsoft to sign all the 10-year deals with cloud gaming companies and Nintendo for Call of Duty, and reiterating the FTC seemed to be failing to bring any evidence there was any impending harm if the deal went through. But near the end, Weingarten brought up a heck of a key point: this deal, if done, is permanent. Its effects will ripple out many, many years into the future. Judge Corley herself admitted this case has been sped along, “compressed,” and made more complex as a result. There’s a case to be made here for more time… but did the FTC do enough to convince Judge Corley another month will make all the difference?

Who won? When will we know?

I’ve written a lot about the FTC’s arguments this week despite the fact (as Xbox fans keep reminding me, not wrongly), Microsoft really did come out of this whole thing looking smarter, sharper, and better than the FTC at almost every moment. And in a number of ways, Judge Corley seemed to feel that way too. She clearly favored the Microsoft expert economist’s testimony over the FTC’s, had far, far, far more concerns with the FTC’s testimony as a whole, and didn’t seem to understand by the end why the FTC felt Call of Duty was as big of a deal as it said it was.

But what sticks with me, and what I’ve written about repeatedly, is the FTC may have had an easier fight on its hands all along than Microsoft. I won’t be shocked if the verdict is found in favor of Microsoft – after all, basically every other country hasn’t had an issue with the merger, and the one major country that did based its problems off cloud gaming – which got talked about for about 10 minutes of the three hours of closing remarks. But I equally will not be shocked if Judge Jacqueline Scott Corley believes the FTC has earned the extra time it’s asked for. Even if that extra time throws a giant, hulking spanner in the works for Microsoft and Activision and opens the doors to renegotiation, $3 billion payouts, and other nonsense.

“I’m going to do my best. It’s hard.”

At the end of the session today, Judge Corley thanked both parties for their presentations and civility, saying she was especially impressed by the FTC. As a fellow government employee, she said, she recognizes the FTC does not have Microsoft-level resources, but noted proudly that their team had been able to keep up in spite of that.

Aware of the time crunch, Judge Corley joked we shouldn’t expect her to take two to three months to come to a decision, but didn’t give an approximate time-frame. We know both parties have paperwork deadlines at end of day on Friday the 30th, and at noon on Monday, July 3. Tuesday the 4th is a holiday. For those reasons, it’s possible to expect a decision as soon as Wednesday, but it may take longer.

“I’m going to do my best,” Judge Corley said of the decision before her. “It’s hard.”

IGN will continue coverage of the trial’s verdict, as well as everything we learn from trial documents and evidence, especially if parties continue redacting items in see-through sharpie. You can check out our daily roundups right here on IGN for updates on everything that’s happened so far in FTC v. Microsoft, day by day, as well as catch up on our detailed analysis of day one, day two, day three, and day four of the trial.

Rebekah Valentine is a senior reporter for IGN. You can find her on Twitter @duckvalentine.