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Microsoft Regrets Calling FTC ‘Unconstitutional’ in Activision Takeover Hearing

It’s likely, if not probable, that a lot of you who have been keeping an eye on Microsoft’s proposed acquisition of Activision/Blizzard lost track of the latest developments over the Christmas/New Year period. With that being said, however, a lot has happened over the last month so let me quickly bring you up to speed.

The FTC in America has decided to formally investigate the proposed takeover in regard to (in very basic terms) if it would violate any anti-competition laws. The hearing, which is expected to last around 2-3 months, kicked off earlier this month with Microsoft issuing its initial response to the allegations surrounding this, and, overall, their reasons for why the deal should be allowed to go ahead.

Simple enough, right? Well, it seems that following a report via Arstechnica, Microsoft may have just made a bit of a huge blunder in their submission. Put simply, they formally made the argument that the FTC is unconstitutional, and, in a nutshell, does not have the legal authority or right to challenge Microsoft on this… Whoops!

Microsoft Accidentally Calls FTC ‘Unconstitutional’ – #InstantRegret

So, for those of you who don’t understand the significance of this, Microsoft has basically submitted an argument to the FTC (among many other far more legitimate ones it should be noted) that they don’t recognise their authority. It is, for all intents and purposes, pretty much the same thing you see in those somewhat amusing (in a pitiable kind of way) ‘sovereign citizen’ videos on YouTube.

Why the hell would Microsoft do this though? Well, I daresay you won’t be overly shocked to hear that this was a pretty big mistake by their lawyers. What Microsoft did, which is perfectly reasonable and certainly not uncommon in any legal case, is draft out all the potential arguments they could make to the FTC. These are not always good arguments, but it’s effectively asking the lawyers to think both inside and outside the box in a preliminary manner. – Basically, no idea is a bad idea, but when it comes to making the formal submission, some ideas are clearly better than others.

What went very badly wrong, however, is that Microsoft, for reasons unclear, decided to keep this “unconstitutional” argument within their official submission when it very clearly should have been pruned out! – And just to clarify, Microsoft openly states (and I believe them entirely) that they never intended to submit this argument to the FTC. It was literally just ‘thrown out there’ in the initial drafting and was never planned to be pursued any further.

What Happens Now?

Microsoft has formally withdrawn this allegation against the FTC in their submission, and, overall, things should now go back to normal in regard to the investigation. – Given that the submission was made though, I daresay that the FTC is not impressed with this and although it shouldn’t affect their final decision, I expect that Microsoft has not won itself any friends at the regulatory body!

On the plus side though, at least Microsoft didn’t decide to double down on this. Albeit, it would’ve certainly made for some interesting news over the coming weeks!

What do you think? – Let us know in the comments!

Mike Sanders

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