Microsoft Rally Against FTC Over ActiBlizzard Dispute, Says Action Violates Fifth Amendment Due Process Rights

Microsoft has similarly responded to an antitrust lawsuit brought by the US Federal Trade Commission, as the FTC attempts to block the $68.7 billion acquisition of Activision Blizzard announced in January 2022.

CNBC released the full response, which was drafted by Microsoft lawyers. Throughout its 37 pages, Xbox has gone so far as to claim that the FTC’s actions fundamentally violate the Constitution of the United States of America. This is an excerpt from the last section entitled Affirmative and other defenses.

The Committee’s actions violated Microsoft’s right to due process under the Due Process Clause of the Fifth Amendment. The structure of these administrative proceedings, in which the panel initiates and ultimately adjudicates the complaint against Microsoft, violates Microsoft’s Fifth Amendment due process right to adjudicate before an impartial arbitrator.

These administrative actions violate Microsoft’s right to a Fifth Amendment due process due process before a neutral arbitrator as applied to Microsoft because the panel has previously ruled on the merits of immediate action.

Of course, Microsoft’s lawyers also provided more specific counters to the FTC’s allegations. For example, they argued that the purchase of ZeniMax and the subsequent decision to make Starfield and Redfall exclusives to Xbox and PC were unrelated to the Activision Blizzard dispute because both games (and a third unnamed, also slated to be exclusive) were played alone or by small groups.

On the other hand, Microsoft has continued to allow ZeniMax subsidiary Bethesda to support multiplayer games like Fallout 76 and The Elder Scrolls Online on a wide range of platforms. Microsoft claims that Call of Duty falls within the same scope of a mostly multiplayer game that large communities are meant to play. As such, Microsoft would have no interest in removing Call of Duty from PlayStation; Should there be any lingering doubt, Xbox’s offer to put Call of Duty on other platforms on terms commercially favorable to those platforms should overrule itMicrosoft says.

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The response also addresses the FTC’s allegation that Microsoft somehow lied to the European Commission about the ZeniMax acquisition.

No suggestion that Microsoft’s statements to the European Commission about ZeniMax
It was incorrect misleading. Microsoft has explicitly said that it will respect Sony’s current exclusivity
The rights and near-exclusivity for future game titles are on a case-by-case basis, and that’s exactly it
what you did. The European Commission agrees that it was not misled, announcing the day publicly
After complaining that Microsoft made no “commitments” to the European Commission,
The European Commission has not relied on any statements made by Microsoft about future distribution strategy for ZeniMax games. Instead, the European Commission agreed
Transaction ‘unconditionally’ as it concluded that the transaction would not arouse competition

Microsoft says the FTC’s complaint should be dismissed because the commission can’t prove how the transaction will make consumers worse off because they’ll be able to access Activision games in new, more affordable ways (i.e. Game Pass). Finally, there’s also a direct jab at Sony, which has tried to oppose the deal every step of the way.

Sony may prefer to protect the revenue it receives from more expensive individuals
Games sales, but antitrust laws do not serve to isolate the dominant player in the market and its characteristics
preferred business model from the competition.

In related news, the UK’s Competition and Markets Authority (CMA) has publicly shared the responses from the public. More than 2,100 emails were sent to the CMA, of which nearly three-quarters favored completing the deal. CMA is still in Phase 2 of its investigation of the Microsoft/Activision Blizzard deal.

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