“The acquisition of Activision Blizzard by Microsoft, if completed, will be the largest in the history of tech industry.”

Salvo Fasciana, lecturer in Intellectual Property and IT Law at the University of Sussex, gives Leaders League his opinion on major matters in the field, from the adequacy decision for the EU-US Data Privacy Framework, adopted by the EU Commission, to the acquisition of Activision Blizzard made by Microsoft.

Posted jeudi, septembre 14 2023
“The acquisition of Activision Blizzard by Microsoft, if completed, will be the largest in the history of tech industry.”

Salvo, how did you become a lecturer in Intellectual Property and IT Law at the University of Sussex?

I am a law graduated at University of Palermo. In Palermo I also did my training contract. After that, I have decided to mix my passions (entertainment and technology) with my study and I have attended an LL.M in Media Law at Queen Mary University of London. There, I have studied the European-English-American legal system in relation to specific subjects such as Media and Intellectual Property Law, Interactive Entertainment Law, and Data Protection and Information Security. After that, I moved to Barcelona to work in the legal department of a Startup dealing with the Intellectual Property infringement and related enforcement At that time, however, I was already preparing my Ph.D proposal.
I did my doctorate at Queen Mary University of London. My thesis “A proposal for a Players’ Bill of Rights” was dealing with the public/constitutional significance of video games in the current digital society. During my Ph.D I had the chance to become teaching associate for various modules involving intellectual property such as IP and business and Trade Secret. During the last stage of my Doctorate, I found a lecturer position at Newcastle University where I taught Intellectual Property Law. After one year, I got a permanent position at Sussex University where I teach modules in relation to law and technology. Specifically, thanks to my multidisciplinary academic path, I have the chance to teach Intellectual Property, Law and Entertainment, Creative Industries, Cyberlaw, Information Technology and Privacy and Data Protection.

The European Commission has recently adopted the adequacy decision for the EU-US Data Privacy Framework. This indicates that the US ensures an adequate level of protection for personal data transferred from the EU to US companies under the new framework, which is comparable to level of the EU. What do you think could be the consequences of this decision?

After the failure of the Safe Harbour Privacy Principles and the EU-US Privacy Shield, the 2023 EU Commission adequacy decision is a welcomed news. After the temporary solution represented by the Standard Contractual Clauses, such adequacy decision ensures that data can be transmitted between the European Union and the U.S on the basis that the latter offer adequate safeguards and protection to EU data transferred within its territory. In other words, the transfer to the country in question will be assimilated to intra-EU transmissions of data. Furthermore, given that the adequacy decision involves the EU commission, the European Data Protection Board and the representative of EU countries, we may expect a stronger agreement this time.
However, I struggle to believe that EU and U.S became suddenly alike in how dealing with privacy and data protection. Schrems I and II told us that EU and US have different foundational principles in dealing with data subject’ rights, interpretation of proportionality principle in relation to access and use of personal data, and surveillance. In other words, it is hard to believe that U.S now offer an essentially equivalent, and therefore sufficient, level of protection as guaranteed by the GDPR and Charter of Fundamental Right. On this regard, privacy advocacy organizations affirmed their concerns highlighting that in order to make this adequacy decision work, we may need changes in the U.S surveillance law; which we don’t’ have it. However, it is fair to say that it is crucial to test the new system before announcing legal challenges to it.

I struggle to believe that EU and U.S became suddenly alike in how dealing with privacy and data protection.”

Microsoft made the acquisition of Activision Blizzard official, worth approximately $69 billion. What are the competition issues raised by the transaction?

I am a video game passionate to the extent that video games constitute my first research area. If completed, this deal will be the largest acquisition in the history of tech industry. As a gamer and video game researcher, I do think this acquisition may pose threats to the industry and, subsequently, to 3 billion of video game consumers. In this sense, it does not come as surprise that the Federal Trade Commission officially filed an – ongoing – antitrust administrative complaint against Activision-Blizzard. In response, Microsoft claimed that the deal will account for a 10% of the market. However, I am not convinced this is true. On this regard, in the past, the OECD already recognized that digital market is impacting and transforming competition law. The concept of competition law necessarily evolved in relation to the physical market and tangible products. However, the digital economy does not work according the same coordinates. For instance, 7 out 10 digital products are offered in the market for free, and this also applies to video game with the free-to-play games. Competition law evolved also around the concept of product pricing, which in the digital economy is not such a straight forward concept. This is due to the increasing importance of data. Big Data constitute knowledge that guides innovation and decision making and it is not easy to understand how to insert data within a flowing and functioning competition analysis. For instance, World of Warcraft (One of Blizzard’s game) currently counts 8.5 million of active players. World of Warcraft is more a platform than a game, a virtual world where millions of data subjects release personal data ready to be harvested and exploited. This acquisition may pose risk of tipping effect with “winner-takes-all” outcome also taking into consideration the network effects of games like World of Warcraft or Diablo will generate. The digital economy – here represented by the Activision-Blizzard acquisition - is showing how antitrust authorities struggle to master the coordinates for a productive competition analysis. My concern is that the gaming industry will be the litmus test of such poor understanding of the video game market.

As a gamer and video game researcher, I do think this acquisition may pose threats to the industry and, subsequently, to 3 billion of video game consumers.”

You said your research is about video games and their significance for the digital society. What does it mean?

In my research, I observe video games under different in relation to different areas of law such as Information Technology, Intellectual Property, and Data Protection. However, I also tried to observe video games as quasi-public space where people live a portion of their life. Games like Roblox, World of Warcraft, Minecraft, Grand Theft Auto Online, present features that make them more similar to platforms, rather than mere games.
In my research, I look at video games as they were “digital countries”. Digital countries have three key components: territory, population, and sovereignty - just like their physical counterparts.
In the digital realm, territory is not defined by geographic coordinates but rather by the essential physical infrastructure that enables users to interact with the digital space. Data centers, servers, Internet standards, and communication systems make up this digital territory. One crucial aspect of digital countries is their digital sovereignty, which empowers the digital state to govern its territory. This sovereignty is inherent and exclusive to the state, allowing it to wield authority without restrictions. Essentially, digital states hold control over the design, production, sale, and maintenance of the digital environment that users inhabit. Unlike physical countries that often unite people based on ethnicity, history, culture, or language, digital countries operate on a different level. Their populations are composed of "netizens" who come together based on shared interests and activities. Digital citizenship is born from this social and cultural membership, where individuals voluntarily agree to abide by specific rules and norms. This creates a unique form of citizenship arising from some sort of "Ius communitatis."

To conclude, my research dives into the analysis of video game players as a prototype of the digital citizen of the future.