Microsofthas revised its argument against the Federal Trade Commission’s lawsuit preventing the company from acquiring Activision Blizzard. In the amended document,Microsofthas retracted its inflammatory claims that the FTC is in violation of the US Constitution, and a company spokesperson has also made some statements regarding the change.
Last month,Microsoft accused the FTC of violating the Constitutionin a scathing response to the FTC’s lawsuit that has held up Microsoft’s acquisition of Activision Blizzard. Toward the end of the 37-page document, Microsoft listed a series of five bullet points that brought the Constitution into the equation, suggesting that the FTC’s structure with an in-house court is a violation of the separation of powers. Microsoft also argued that its Fifth Amendment right to due process was being violated since it believes the Commission has prejudged the merits of the case.
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In a revised statement, Microsoft omitted its constitutional bullet points while leaving the majority of its other defenses of theActivision Blizzard mergerintact. A Microsoft public affairs spokesperson admitted that “we should have dropped these defenses before we filed.” It seems that Microsoft took every possible argument it could find and threw it all on the table and is now stepping back with a cooler head. Microsoft also appears to have heard a lot of the criticism surrounding its initial arguments, saying that “we appreciated feedback about these defenses.”
Microsoft’s purchase of Activision Blizzard would place the company in control of major franchises likeCall of DutyandWorld of Warcraft, and the merger has drawn the attention of regulatory bodies around the world. The FTC and a chunk of the gaming industry are understandably worried that Microsoft could use this acquisition to stifle competition bylimiting access toCall of Dutyon competing consoles, forcing consumers to use Microsoft’s own Xbox consoles.
Microsoft has tried to address this concern by saying that a significant portion ofCall of Duty’s revenue comes from sales on other consoles and that it wouldn’t make financial sense to eliminate that revenue stream. It also pointed to titles likeThe Elder Scrolls Onlinewhich have remained accessible on multiple platforms, illustrating that exclusivity is harmful to multiplayer games which rely on a large community. Whether or not Microsoft actually intends to honor these points is the question, and the FTC has been increasingly active in the gaming industry with investigations followingStar Wars Battlefront 2’s loot boxes, the blocking of a proposed Nvidia merger, and a record-breakingpenalty levied against Epic Games.
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