Microsoft Claims FTC Lawsuit is Unconstitutional in 37-Page Response

Ryan Epps, Tech Times 24 December 2022, 07:12 am

On Dec. 22, Microsoft finally filed its response to the US Federal Trade Commission in accordance with the agency's recent antitrust lawsuit against the tech conglomerate over its proposed purchase of Call of Duty maker Activision Blizzard.

Microsoft's response, filled with already long-spoken rhetoric surrounding its convictions of the purchase, amounts to a long-winded 37-page document in which the firm underscores why the antitrust concerns should be put to rest. One section reads as follows:

"These proceedings are invalid because the structure of the Commission as an independent agency that wields significant executive power, and the associated constraints on removal of the Commissioners and other Commission officials, violates Article II of the US Constitution and the separation of powers."

Specifically highlighting the administrative law judges appointed by the FTC over Federal circuit ones, Microsoft explains that this is in bad practice. It states that the way in which the FTC approached the matter initially "violates Microsoft's Fifth Amendment Due Process right to adjudication before a neutral arbiter."

The firm also reiterated previous remarks on the complaints made by its direct industry competitor, Sony, stating that the PlayStation owner shouldn't be "insulated" by antitrust laws. Microsoft specifically denotes Sony's PlayStation as the "dominant market player" and says that the FTC's newfound lawsuit is only a way of improving this foothold.

Earlier in December, Microsoft claimed that Sony preferred to speak with regulators instead of Microsoft itself when pertaining to the Xbox Activision deal. Much of the constraints made by Sony hinder the availability of Activision's Call of Duty franchise, which is a major hit on PlayStation consoles.

Despite several potential deals, Sony has stuck to its guns and remained adamant in its approach to keeping the franchise in its corner, despite several attempts made by Microsoft to quell its concerns of exclusivity.

Microsoft has repeatedly stated no interest in making Call of Duty exclusive. In fact, the firm even reached an agreement with Nintendo to bring Call of Duty to the Switch for up to 10 years.

Beyond its clashing with Sony, Microsoft has also made various remarks regarding mobile gaming expansions in its address to the FTC. Activision Blizzard might be known for its World of Warcraft and Call of Duty franchises, but of major import for Microsoft is its ownership over King, makers of many of the most gangbuster mobile experiences, the main among them being Candy Crush.

In a statement to The Verge, Microsoft president Brad Smith relays conviction in the matter, stating that the firm is "committed to creative solutions with regulators that will protect competition, consumers, and workers in the tech sector."

The FTC complaint mainly focuses on Microsoft's potential ability to limit its competitors from gaining access to specific games via its new subscription business, in the form of Game Pass, "cloud-gaming business," i.e. Xbox Cloud Gaming, and its consoles.

In regards to three of its newly owned Zenimax titles, developed under Bethesda, Microsoft stated those games "are designed to be played primarily alone or in small groups." Thus, keeping them exclusive to Xbox and PC wouldn't hurt the communities around them, while Call of Duty, on the other hand, is "designed to be played together by broad communities of gamers on different platforms."

It's unclear how exactly the FTC antitrust lawsuit against Microsoft will shake up, but many are seemingly agreeing with Microsoft's new remarks. Apt of all is Activision Blizzard CEO Bobby Kotick's statement to CNBC:

"There is no sensible, legitimate reason for our transaction to be prevented from closing. Our industry has enormous competition and few barriers to entry. We have seen more devices than ever before enabling players a wide range of choices to play games...We believe we will prevail on the merits of the case."