Microsoft’s Nadella can be questioned in gamers’ Activision deal lawsuit

Microsoft CEO Satya Nadella can be questioned in a lawsuit by a group of video gamers who claim the tech company’s $69 billion purchase of “Call of Duty” maker Activision will hurt competition, a federal judge in San Francisco said on Monday.

Microsoft CEO Satya Nadella can be questioned in a lawsuit by a group of video gamers. | Photo Credit: AP

Microsoft CEO Satya Nadella can be questioned in a lawsuit by a group of video gamers who claim the tech company’s $69 billion purchase of “Call of Duty” maker Activision will hurt competition, a federal judge in San Francisco said on Monday.

U.S. District Judge Jacqueline Scott Corley in an order denied Microsoft’s bid to stop the gamers’ lawyers from deposing Nadella, who has served as CEO since 2014 and helped guide the company’s blockbuster deal for Activision that closed in October.

“Mr. Nadella — as Microsoft’s CEO and ultimate decisionmaker for the ‘largest transaction Microsoft has ever made’ — may have unique relevant knowledge which plaintiffs are entitled to explore,” Corley wrote.

The gamers’ case has advanced in parallel to a lawsuit the Federal Trade Commission filed last year to block the deal. Corley in that case declined to stop the purchase, and the FTC in December asked a federal appeals court to revive the agency’s challenge.

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Microsoft had no immediate comment on the court’s order.

An attorney for the gamers, Joseph Alioto, said he was pleased with the ruling.

Plaintiffs generally face a high bar to question top corporate executives. A Florida appeals court last week overturned a trial judge who said Tesla CEO Elon Musk could be questioned in a lawsuit.

The gamers sued over the Microsoft-Activision deal in December 2022, saying it would stifle competition and harm consumers.

In seeking to question Nadella, their lawyers argued Microsoft had not shown any “extraordinary circumstances” to block a deposition. The FTC has already questioned Nadella in its case.

Attorneys for Microsoft in a filing said the gamer plaintiffs had not shown that Nadella has “unique, first-hand, non-repetitive knowledge that is not available through less burdensome means.”

They said the deposition “is likely to be a waste of time and is disproportional to the needs of this case.”

Overruling the objections, Corley said the gamers could question Nadella for up to three hours “at a time and place convenient to Mr. Nadella and the parties.”

The judge scrapped a February trial for the gamers because of the appeals pending in the 9th Circuit. She set a status hearing for Feb. 6.

The case is Dante Demartini et al v. Microsoft, U.S. District Court, Northern District of California, 3:22-cv-08991-JSC.