Preliminary Injunctions

• eBay Inc. v. MercExchange L.L.C. 547 U.S. 388 (2006). Unanimous Thomas opinion that confused preliminary with permanent injunctions. e "How Supreme Court Justices Move the Law," Hasen, Richard.

• "Section 13(b) of the Federal Trade Commission Act provides “[u]pon a proper showing that, weighing the equities and considering the Commission’s likelihood of ultimate success, such

action would be in the public interest . . . a preliminary injunction may be granted . . . .” 15 U.S.C. § 53(b)."

This is better than the four-part test.

• FTC v. Microsoft and Activision (2023): "Because the FTC has not demonstrated a likelihood of ultimate success on the merits, the

Court need not proceed to the balance of equities question. See United States v. Siemens Corp., 621 F.2d 499, 506 (2d Cir. 1980). The Court finds, however, that even if the FTC had met its burden, the balance of equities do not fall in its favor. The FTC correctly notes private equities, such as the potential skuttling of the merger if it does not close by July 18, “cannot on its own overcome the public equities that favor the FTC.” FTC v. Wilh. Wilheslmsen Holding ASA, 341 F. Supp. 3d 27, 73-74 (D.D.C. 2018); see also Warner, 742 F.2d at 1165 (“When the Commission demonstrates a likelihood of ultimate success, a countershowing of private equities alone does not justify denial of a preliminary injunction”). But the balancing of equities is not a pointless exercise. In Warner, for example, the Ninth Circuit observed “public equities may include beneficial economic effects and pro-competitive advantages for consumers.” Id. at 1165 (cleaned up). Because in that case the record contained “conflicting evidence on the anticompetitive effects of the merger,” the Ninth Circuit held it was unclear whether those public equities supported the grant or denial of the preliminary injunction. Id. It nonetheless held the public equities outweighed the private because the Commission would be denied effective relief if it ultimately prevailed and ordered divestiture. The court reasoned: “Since the proposed joint venture calls for Polygram to dismantle its distribution operations, it would be exceedingly difficult for Polygram to revive the operations to comply with a divestiture order.” Id. Here, at best “the record contains conflicting evidence on the anticompetitive effects of the merger”; thus, the FTC cannot point to beneficial economic effects as a public equity. Id. Moreover, the administrative trial before the ALJ commences on August 2, in just a few weeks. By pre-existing contract, Call of Duty will remain on PlayStation through the end of 2024. There will be no foreclosure of Call of Duty pending the ALJ’s decision. Gamers will be able to play just as they always have. The FTC insists the difficulty in ordering post-acquisition divestiture is the public equity that prevails. (Dkt. No. 291-2, FTC’s Findings and Conclusions at p. 194-195 ¶ 153.) But it does not cite anything specific about this merger to support that assertion. It is a vertical acquisition. Microsoft and Activision will act as parent and subsidiary. There is no planned dismantling of operations, as in Warner. What exactly about the merger would make it difficult to order an effective divestiture? The FTC does not say. Its argument, at bottom, is the equities always weigh in favor of a preliminary injunction. But that argument ignores the law. So, the balance of equities is a separate, independent reason the FTC’s motion must be denied. "