Judge Jacqueline Corley penned a remarkably shoddy decision in the Microsoft-Activision case. We have a problem with bad and often random decisions by judges.
Your anger and frustration are on target, Matt. It's an implication of the whole system when one judge's decision has such weight and is so wrong-sided. I'm glad you call it out so clearly, in the terms and language of the law and the court. And give notice to all.
The reporter blames Lina Khan for bringing the case and does not even begin to deal with how poorly the reasoned Judge Corley’s ruling was. And that she rewrote the Clayton Act, just like Alito rewrote the Voting Rights Act
Sadly, it's behind a paywall and I don't sign in to anything... That said, I'll be super sad when Lina Kahn leaves, though I was angry at the FTCs overreach on Matt Taibbi, which I don't know if she was involved in. Still, I consider her an American Hero.
Let me add my appreciation for your coverage of this case.
Wonder if you would think it worthwhile to review the MSM reporting on the case. Everything I've seen (NYT/WSJ prime examples) grossly violate basic principles of journalism. None make any mention of the central "what's the relevant market where competition might be threatened" question. None make any attempt to present the fTC's key arguments of explain why the Judge rejected those arguments/evidence. All "outside experts" quoted were from the pro-M&A antitrust bar or corporate lobbying groups. Those affiliations were not disclosed and no effort was made to present comments from anyone favoring stronger antitrust enforcement. None made any mention that the Judge's son worked for Microsoft. None of the authors of these articles had any interest in presenting facts that readers might be able to independently evaluate. They had a firm opinion of what the "truth" of this situation was (e.g. huge loss for FTC, it was always a hopeless case FTC should never have pushed, merger has no potential to harm consumers) and were using the nominal structure of honest journalism to tell readers what they should think.
These battles have lots of dimensions, and Matt you've done yeoman work laying out many of them. But I think the MSM's abandonment of traditional journalism and standards that respect both the intelligence of readers and the complexity of the issues they purport to cover is a crucial part of the larger battle.
Hit me Hurbert, How is it, WE as a citizen can not seat on a jury IF we are any way tied to someone on the case. BUT, as here a judge or CONGRESS to me, should not be able to be on a committee IF you are personally tied. One subject matter I like for US We the people need to stop. NOTEING to how many times, we got congress and being head of a committee that flatout got cash-homes- onward. I take note too. There was and energy committee from the House side. Over when 2008 oil-gasoline. You can pull the senate side clips from then but not that House, NOTING, to Rex Tillerson then head of Exxon-moble. Stating, where they shut down refinery to make a man USA man made shortage, when Oil went down to $35 B. vs 147. But We had a gasoline shortage, NOTE. Point head of that committee got over$200,000 in cash and two homes. The California Rep-D that push questioning, on and got it out there, Stated, Well the public will see and learn. NOPE, it is gone , I can not fine it now, as to the internet search. You get senate side, THAT was over lets kill Future trading. WHICH to me is the only thing standing from Big Oil having full control over pricing. Big Oil a monopoly? I think so. I call sister companies, I think Rockefeller made sure of that, again 1930`s
This is a telling quote. Obsession over the “efficiency of output” dominates across the economy. It is an artifact of the 20th century industrial age. The more output per input was a proxy for achieving outcomes, which essentially was to make money by providing something of value.
If you can a produce a black Model T efficiently enough you can open up the car market to the middle class. “Consumer welfare”, ie prices, is a metric for one metric for this desired outcome.
The rule of “economies of scale” actually was a thing when the economy was primarily manufacturing widgets. It led to all the things Matt write about: consolidation, outsourcing, squeezing labor, lack of process redundancy and little innovation.
In the modern, complex globally interconnected economy, focusing primarily on output efficiency is no longer a proxy for creating value. It’s a measure that indicates a race to the bottom.
I think you got something there,,, and as too race to the bottom. Are we on same page as to bottom line, We have, you dont. for controll of the massies 1% vs the 99%. that one% is going to get smaller tho..lol outside the need for nobilies to control the massies - people.
I mention in my book there was a brilliant YouTube meme awhile back depicting the Jetsons living at the same time as the Flintstones, i.e. above them. 😂
I happened to be listening to Bloomberg radio when the decision came down. It was not unlike a hometown sports station after the home team won the championship.
Really surprised at the positive reception this decision is getting in the NYTimes reader comments, and the amount of anti-Lina Khan sentiment being expressed. We still have a lot of work to do to educate people...
I agree Scott. One should be highly skeptical of any comment sections that have such low bar for account creation and posting. It is trivially easy to create 10 accounts and post rehashed versions of the same supportive sentiment in the name of 'manufacturing consent'. The NYT audience is also largely the wealthier neoliberal class who cannot speak against m&a as it is a large source of their wealth.
“All this for a shooter video game” is such a rancid line. She’s showing she doesn’t care at all about the easily the biggest entertainment product release in America and that she thinks it’s beneath her
Thanks Matt, love the focused, single-significant case format.
I also like how, in a passing summary statement, you ‘red flag’ that one destructive principle that drives the inequities of our justice system:
“That’s always a red flag, when a judge blindly trusts powerful people who will make a lot of money if something goes their way.”
As you point out, this bias runs high in lawyers professionally trained in corporate systems, and in the academic ‘experts’ who are their witnesses. It is the dirty fossil fuel that drives our systemically biased Justice system, hidden under a cloud of non-sequiturs, false courtesies, and lies like the ones Judge Corley used here.
The history of the human race is not ennobling, unless you think getting credit for winning a war is the highest form of nobility. But we’re Americans- anyone with any money suddenly becomes a potential patron, and we’ll all press forward to kiss that ring hand!
Matt, you italicized substantially in the quote from the judge, but I think it should have been probably, since it goes from a possibility to a near certainty. 'The Clayton Act reads that mergers that “may substantially lessen competition” are unlawful. Judge Corley re-wrote this as, “the FTC must show the merger will probably substantially lessen competition.”' Still, even if she followed her own logic here, it is almost a near certainty.
At a glance it looks like the judge may have shifted the burden of proof, but to be certain I’d have to read more outside my area than I can force myself to do ATM.
You’ve written a brilliant analysis of what was wrong with the judge's decision. As far as her conflict due to her son’s employment, that would seem to me to depend upon his job and level at Microsoft and you didn’t mention it. If he was a significant contributor or high paid maybe. But, I am wondering….
We can only hope that the Ninth Circuit Court of Appeals rights the wrongs of the District Court Judge's myopic decision and that the USSC does not take an appeal from its decision. The Court of Appeals now becomes the place where judges get schooled on the Clayton Act.
Looks like Microsoft was quick to react to this ruling: I got an email yesterday saying that GamePass Ultimate subscription prices would be “updated” to $16.99/month. Microsoft says “[t]his updated pricing allows us to bring more value and choice to Xbox Game Pass Ultimate.”
Don’t you wonder who in the Biden Administration is vetting there judicial appointments and when, if ever, is Biden going to realize that picking judges from “big law” will typically preclude implementing change since, as you Matt have pointed out so often, big law likes, and makes its fortunes from, the status quo
He’s been picking a lot of judges from other areas, like public defenders offices too. I agree too many big law folks as well, but its not as egregious as it was under trump.
This is disappointing. Very interesting point about changing the standard of review under Clayton. My biggest concern though with an appeal is how do we unscramble an egg? It’s tough. Finally, overall I do think Biden has done a good job of appointing judges with different kinds of experiences, not just white shoe lawyers, but I definitely take Matt’s point about getting big law on the bench.
By any chance is the short document hosted on a platform other than Twitter? Unfortunately, when viewing Lee's twitter account all I can see is an 'Error' message where their tweets should be listed. None of the responses to that tweet load in when using the link, so I can't seem to access any of the mentioned discussion points.
Maybe I'm in the minority on these issues, but twitter's increasing closed-garden model is really going to stink for viewing this sort of content. There's been a lot of great discussions over the years on the platform, but I'm not sure it'll continue to be so at this rate.
Really appreciate everything you put together here. It was very interesting, even without the ability to access the twitter links you mentioned.
Your anger and frustration are on target, Matt. It's an implication of the whole system when one judge's decision has such weight and is so wrong-sided. I'm glad you call it out so clearly, in the terms and language of the law and the court. And give notice to all.
The NY Times coverage of this case is a perfect example of what is wrong with journalistic coverage of this issue.
https://www.nytimes.com/2023/07/11/technology/lina-khan-ftc-strategy.html
The reporter blames Lina Khan for bringing the case and does not even begin to deal with how poorly the reasoned Judge Corley’s ruling was. And that she rewrote the Clayton Act, just like Alito rewrote the Voting Rights Act
Sadly, it's behind a paywall and I don't sign in to anything... That said, I'll be super sad when Lina Kahn leaves, though I was angry at the FTCs overreach on Matt Taibbi, which I don't know if she was involved in. Still, I consider her an American Hero.
Let me add my appreciation for your coverage of this case.
Wonder if you would think it worthwhile to review the MSM reporting on the case. Everything I've seen (NYT/WSJ prime examples) grossly violate basic principles of journalism. None make any mention of the central "what's the relevant market where competition might be threatened" question. None make any attempt to present the fTC's key arguments of explain why the Judge rejected those arguments/evidence. All "outside experts" quoted were from the pro-M&A antitrust bar or corporate lobbying groups. Those affiliations were not disclosed and no effort was made to present comments from anyone favoring stronger antitrust enforcement. None made any mention that the Judge's son worked for Microsoft. None of the authors of these articles had any interest in presenting facts that readers might be able to independently evaluate. They had a firm opinion of what the "truth" of this situation was (e.g. huge loss for FTC, it was always a hopeless case FTC should never have pushed, merger has no potential to harm consumers) and were using the nominal structure of honest journalism to tell readers what they should think.
These battles have lots of dimensions, and Matt you've done yeoman work laying out many of them. But I think the MSM's abandonment of traditional journalism and standards that respect both the intelligence of readers and the complexity of the issues they purport to cover is a crucial part of the larger battle.
Hit me Hurbert, How is it, WE as a citizen can not seat on a jury IF we are any way tied to someone on the case. BUT, as here a judge or CONGRESS to me, should not be able to be on a committee IF you are personally tied. One subject matter I like for US We the people need to stop. NOTEING to how many times, we got congress and being head of a committee that flatout got cash-homes- onward. I take note too. There was and energy committee from the House side. Over when 2008 oil-gasoline. You can pull the senate side clips from then but not that House, NOTING, to Rex Tillerson then head of Exxon-moble. Stating, where they shut down refinery to make a man USA man made shortage, when Oil went down to $35 B. vs 147. But We had a gasoline shortage, NOTE. Point head of that committee got over$200,000 in cash and two homes. The California Rep-D that push questioning, on and got it out there, Stated, Well the public will see and learn. NOPE, it is gone , I can not fine it now, as to the internet search. You get senate side, THAT was over lets kill Future trading. WHICH to me is the only thing standing from Big Oil having full control over pricing. Big Oil a monopoly? I think so. I call sister companies, I think Rockefeller made sure of that, again 1930`s
“The core question in antitrust is output.”
This is a telling quote. Obsession over the “efficiency of output” dominates across the economy. It is an artifact of the 20th century industrial age. The more output per input was a proxy for achieving outcomes, which essentially was to make money by providing something of value.
If you can a produce a black Model T efficiently enough you can open up the car market to the middle class. “Consumer welfare”, ie prices, is a metric for one metric for this desired outcome.
The rule of “economies of scale” actually was a thing when the economy was primarily manufacturing widgets. It led to all the things Matt write about: consolidation, outsourcing, squeezing labor, lack of process redundancy and little innovation.
In the modern, complex globally interconnected economy, focusing primarily on output efficiency is no longer a proxy for creating value. It’s a measure that indicates a race to the bottom.
I think you got something there,,, and as too race to the bottom. Are we on same page as to bottom line, We have, you dont. for controll of the massies 1% vs the 99%. that one% is going to get smaller tho..lol outside the need for nobilies to control the massies - people.
I mention in my book there was a brilliant YouTube meme awhile back depicting the Jetsons living at the same time as the Flintstones, i.e. above them. 😂
Wasnt there a movie, with the two cartoons, Or yeah, seen something over that. Brant. Who won?
It wasn’t a battle just a society living over an other.
I happened to be listening to Bloomberg radio when the decision came down. It was not unlike a hometown sports station after the home team won the championship.
Really surprised at the positive reception this decision is getting in the NYTimes reader comments, and the amount of anti-Lina Khan sentiment being expressed. We still have a lot of work to do to educate people...
I agree Scott. One should be highly skeptical of any comment sections that have such low bar for account creation and posting. It is trivially easy to create 10 accounts and post rehashed versions of the same supportive sentiment in the name of 'manufacturing consent'. The NYT audience is also largely the wealthier neoliberal class who cannot speak against m&a as it is a large source of their wealth.
“All this for a shooter video game” is such a rancid line. She’s showing she doesn’t care at all about the easily the biggest entertainment product release in America and that she thinks it’s beneath her
Thanks Matt, love the focused, single-significant case format.
I also like how, in a passing summary statement, you ‘red flag’ that one destructive principle that drives the inequities of our justice system:
“That’s always a red flag, when a judge blindly trusts powerful people who will make a lot of money if something goes their way.”
As you point out, this bias runs high in lawyers professionally trained in corporate systems, and in the academic ‘experts’ who are their witnesses. It is the dirty fossil fuel that drives our systemically biased Justice system, hidden under a cloud of non-sequiturs, false courtesies, and lies like the ones Judge Corley used here.
The history of the human race is not ennobling, unless you think getting credit for winning a war is the highest form of nobility. But we’re Americans- anyone with any money suddenly becomes a potential patron, and we’ll all press forward to kiss that ring hand!
Matt, you italicized substantially in the quote from the judge, but I think it should have been probably, since it goes from a possibility to a near certainty. 'The Clayton Act reads that mergers that “may substantially lessen competition” are unlawful. Judge Corley re-wrote this as, “the FTC must show the merger will probably substantially lessen competition.”' Still, even if she followed her own logic here, it is almost a near certainty.
At a glance it looks like the judge may have shifted the burden of proof, but to be certain I’d have to read more outside my area than I can force myself to do ATM.
can this be kicked up to the high court. where there is a 3 judge State level?
Matt,
You’ve written a brilliant analysis of what was wrong with the judge's decision. As far as her conflict due to her son’s employment, that would seem to me to depend upon his job and level at Microsoft and you didn’t mention it. If he was a significant contributor or high paid maybe. But, I am wondering….
Yes, just like Chuck Schumer's daughters working for Facebook and Amazon. It's all good.
We can only hope that the Ninth Circuit Court of Appeals rights the wrongs of the District Court Judge's myopic decision and that the USSC does not take an appeal from its decision. The Court of Appeals now becomes the place where judges get schooled on the Clayton Act.
Looks like Microsoft was quick to react to this ruling: I got an email yesterday saying that GamePass Ultimate subscription prices would be “updated” to $16.99/month. Microsoft says “[t]his updated pricing allows us to bring more value and choice to Xbox Game Pass Ultimate.”
Looks like Xbox consoles are getting the treatment too: https://www.techradar.com/gaming/xbox/microsoft-confirms-xbox-series-x-and-xbox-game-pass-price-increases
Have you considered responding to Ben Thompson's arguments about all this?
Don’t you wonder who in the Biden Administration is vetting there judicial appointments and when, if ever, is Biden going to realize that picking judges from “big law” will typically preclude implementing change since, as you Matt have pointed out so often, big law likes, and makes its fortunes from, the status quo
He’s been picking a lot of judges from other areas, like public defenders offices too. I agree too many big law folks as well, but its not as egregious as it was under trump.
This is disappointing. Very interesting point about changing the standard of review under Clayton. My biggest concern though with an appeal is how do we unscramble an egg? It’s tough. Finally, overall I do think Biden has done a good job of appointing judges with different kinds of experiences, not just white shoe lawyers, but I definitely take Matt’s point about getting big law on the bench.
Lee Hepner's "short document" link seems broken
I believe it is:
https://twitter.com/LeeHepner/status/1678870605666594816
thank you for the heads up!
By any chance is the short document hosted on a platform other than Twitter? Unfortunately, when viewing Lee's twitter account all I can see is an 'Error' message where their tweets should be listed. None of the responses to that tweet load in when using the link, so I can't seem to access any of the mentioned discussion points.
Maybe I'm in the minority on these issues, but twitter's increasing closed-garden model is really going to stink for viewing this sort of content. There's been a lot of great discussions over the years on the platform, but I'm not sure it'll continue to be so at this rate.
Really appreciate everything you put together here. It was very interesting, even without the ability to access the twitter links you mentioned.