We've dealt with this, too. FIL sees no issue with giving one kid more than another, because he loves one more than another, and what's the problem when it's true? He favored DH over SIL1 and SIL2 (who were preteens when he married MIL, so they're technically his stepdaughters and DH's half-sisters) to the point where things are still a bit strained between DH and his sisters, this many years later. He liked Niece better than Nephew (both SIL1's kids), but that changed when Niece had a son in her teens, without the guy still being in the picture . . . her son is a year younger than Babybartfast, but FIL is pretty blatant about how much more he likes Babybartfast than Niece'sSon. The first Christmas, MIL smuggled most of FIL's presents to our house so it wasn't quite so obvious at the big family get-together that Niece'sSon had one small present from FIL and Babybartfast had two dozen big ones. She bought several things for Niece'sSon to even things out, but even so it was awkward. She also put her foot down and demanded that FIL redirect some of the many toys he bought for DH and give them to Nephew (who is also not a favored relative in FIL's eyes).
Now we just make sure we're not opening presents with them in the room. I ended up hosting Christmas this year specifically so MIL wasn't obligated to invite SIL1 & clan over to her house - since she wasn't hosting, it wasn't her call. We didn't get presents for SIL1's family and as far as I know, they didn't get any for us. We did get SIL1 a birthday present (her birthday is the 26th), but we sent that home with MIL to get passed on to SIL1 next time she sees her.
As for FIL . . . it's looking like he's going to like Babybartfast better than Bittybartfast, and that's getting nipped in the bud right now. I don't care how he feels, but he darn well isn't going to show one whit of preferential treatment between our girls or he's not going to get to see either of them. MIL feels the same way, so as of yet (Bittybartfast is just 6 months old) my suspicions are just suspicions because he's not been given the opportunity to treat them differently.