Microsoft walks back comments on $100b merger

Microsoft has walked back its claim that the FTC’s opposition of a $100b acquisition of Activision Blizzard is a violation of the US constitution.

Microsoft has softened its response to an antitrust suit brought by the USA’s Federal Trade Commission (FTC), backing down on claims that the suit is a violation of the US constitution.

The news comes courtesy of Axios, which claims that Microsoft admitted to making a mistake when it said that the FTC’s attempt to stop the company from acquiring Activision Blizzard. Microsoft reportedly filed a revised response to the lawsuit with much less incendiary language.

“The FTC has an important mission to protect competition and consumers,” Microsoft spokesperson David Cuddy told Axios, “We quickly updated our response to omit language suggesting otherwise based on the constitution.”

If successful, Microsoft’s acquisition of Activision Blizzard would be the biggest merger in video game history. Photo: Ina FASSBENDER / AFP

Microsoft says that it “put all potential arguments on the table internally”, but that the accusation of a constitutional violation should have been pulled from the response before the initial filing. Activision Blizzard also reportedly revised its statement to the court, again pulling accusations that the FTC violated the constitution.

Microsoft and Activision Blizzard previously argued that the FTC’s lawsuit against it violated multiple parts of the constitution, including Article 3 and the fifth amendment, which both have to do with the processes around court proceedings.

The lawsuit is a part of an ongoing, international investigation into Microsoft’s $100 billion proposed acquisition of Activision Blizzard by competition regulators, including the UK’s CMA, and Australia’s ACCC.

The deal has come under scrutiny from regulators over perceived competition issues, which has seen companies such as Sony strongly oppose it. Sony has claimed that Microsoft has incentive to make acquired games, such as Call of Duty, exclusive to its own platforms, which it claims will stifle competition.

Much of the public conversation around the deal has been about Call of Duty and its potential exclusivity. Picture: Activision

Microsoft hit back at those claims, however, saying that Sony has its own PS5 exclusives that won’t come to Xbox. Microsoft claims that recent games made by third-party publishers, such as Final Fantasy 7 Remake, Bloodborne, and the recently announced Silent Hill 2 remake, are under contracts that explicitly require the exclusion of those games from Xbox.

That said, the CMA released data showing that most people were in favour of Microsoft’s $100b deal, despite Sony’s protests. In submissions it received from the public, over 75% of responses were in favour of the deal going ahead.

Written by Oliver Brandt on behalf of GLHF.