Microsoft Argues FTC Does Not Have A Case To Block The Activision Merger

Microsoft has sent their response to the FTC’s plans to block the acquisition of Activision Blizzard King, arguing why they should allow the transaction to push through.

So, there are no new arguments in Microsoft’s written response sent back to the FTC administrative complaint. They generally claim that the acquisition will be good for competition in the industry, that Call of Duty is not so important that this purchase would harm competition, and that Microsoft’s primary interest is in leveraging Blizzard properties to enter the mobile market. Microsoft also points out that when the EU approved their earlier acquisition of Zenimax, knowing that it would lead to platform exclusivity of some of Zenimax’s games, the EU decided that this situation does not harm competition.

What is interesting is Microsoft’s consistency in denying every argument that the FTC made in their administrative complaint. As is expected for a legal complaint, the company enumerates each claim the FTC makes and essentially denies everything that cannot be independently verified. Microsoft also advises the FTC to refer to their source documents to verify certain claims, some of which have been marked out and are not available to the public.

Now, we had recently covered a statement from an antitrust lawyer, who successfully sued Microsoft, that the FTC under Lina Khan filed this complaint without a real case to fall back on. This is also the text of Microsoft’s defense vs the case.

To quote in part from the document:

“14. The Commission’s claims are too speculative to support any claim on which relief can be granted.

15. Neither the filing of this administrative action nor the contemplated relief is in the public interest, pursuant to 15 U.S.C. § 45.

16. The Complaint reflects improper selective enforcement of the antitrust laws.”

Microsoft also points to several rules and laws that the FTC is violating by filing this complaint, including Articles 2 and 3 of the US Constitution, the Due Process Clause of the Fifth Amendment, and Section 5 of the Federal Trade Commission Act itself.

In other words, the argument being made here to get the complaint dismissed is that the FTC used wrong procedures; again due to the fact that they do not actually have a real case a judge will approve to block this transaction.

The FTC should be seeking remedies via compromises and settlements with Microsoft instead, such as their commitment to bring Call of Duty games to Steam and Nintendo platforms for ten years.

While this case could drag on for years based on how the FTC has approached this, if the acquisition gets approval in the EU and UK first, it may prod the FTC to reverse course. If not, FTC could do something worse than blocking the purchase outright; they could prolong this situation for years. This could put Activision Blizzard King’s status in limbo, and adversely affect the industry in that way.

Source: Verge