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Microsoft abandons claim FTC is acting “unconstitutionally”

Microsoft has abandoned its claim that the Federal Trade Commission (FTC) is acting unconstitutionally in its attempts to block Microsoft’s acquisition of Activision Blizzard.

The company has filed a revised response to the FTC’s lawsuit that no longer includes the argument that the agency’s structure and in-house administrative court, where the Activision case is being heard, violate the Constitution, the separation of powers and the due process clause of the 5th Amendment.

Microsoft spokesperson David Cuddy said the company “quickly updated our response to omit language suggesting otherwise based on the constitution” and added that Microsoft “should have dropped these defenses before we filed.”

Microsoft’s revised response still argues that the acquisition would not unfairly stifle competition with other game makers. The Supreme Court is currently considering a separate case that examines whether the FTC’s structure and in-house administrative court are constitutional.

When announcing their action against Microsoft the FTC said:

“Microsoft has already shown that it can and will withhold content from its gaming rivals,” said Holly Vedova, Director of the FTC’s Bureau of Competition. “Today we seek to stop Microsoft from gaining control over a leading independent game studio and using it to harm competition in multiple dynamic and fast-growing gaming markets.”

The FTC’s case against Microsoft’s acquisition of Activision Blizzard is set to continue into 2023, with a trial set to begin in August. The British Competition and Markets Authority has also expressed concern that the deal could substantially lessen competition in gaming consoles, multi-game subscription services, and cloud gaming services.

Microsoft earlier said they would continue to engage with regulators with a spirit of transparency and openness as they review this acquisition.

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