Microsoft Argues FTC Blocking Of Acquisition Is Unconstitutional

Microsoft’s attempt to acquire Activision-Blizzard is under fire from Biden’s Federal Trade Commission (FTC), and the software giant is firing back. It accused the administration of violating the company’s 5th Amendment rights to due process in the FTC’s efforts to block the deal.

The FTC in December filed suit to block the acquisition. Microsoft is attempting to purchase the result of Activision and Blizzard’s own merger, which combined the creators of the Call of Duty franchise with those of Warcraft, Starcraft, and Diablo respectively.

Microsoft produces Xbox game consoles and publishes the highly successful Halo and Age of Empires franchises.

Its proposed acquisition of Activision-Blizzard would create the world’s third-largest video game company. The $69 billion deal would be the largest in the history of the video game industry.

FTC regulators charge that the deal would allow Microsoft to squash competition for its Xbox console as well as its subscription and cloud-based games enterprises.

Microsoft defended the proposed acquisition by noting that Xbox and Activision-Blizzard are just a pair of “hundreds of game publishers.” Its filing asserted two dozen legal standings against the government lawsuit.

The company said it simply wants to “grow its presence in mobile gaming. The deal would accomplish this goal as three-quarters of Activision-Blizzard’s usage and over a third of its revenue come from mobile devices.

Meanwhile, the FTC complaint excluded mobile gaming as a meaningful market.

At the center of the agency’s charge is that Microsoft will make major titles it will control exclusive to its own platforms. The FTC noted that a pair of coming games, Starfield and Redfall, will be playable only on its products despite telling European antitrust regulators it did not intend to do so.

Microsoft countered that it has not restricted successful titles to its platforms. This claim included the wildly popular Minecraft, which it ported to Playstation and Nintendo after it was acquired by the company eight years ago.

Of major concern to the FTC is the Call of Duty franchise, but Microsoft said it had no intentions for it to become an Xbox exclusive. The company declared that it instead planned to make it “more accessible” by porting it to Nintendo consoles for the next decade.