Microsoft Retracts Claim That FTC’s Procedures Were Unconstitutional

Following the US Federal Trade Commission’s decision to sue against the Microsoft + Activision Blizzard deal, Microsoft responded with many counterarguments, including a claim that the procedures were fundamentally unconstitutional. Here are a couple of snippets:

The Commission’s procedures violate Microsoft’s right to procedural due process under the Due Process Clause of the Fifth Amendment. The structure of these administrative proceedings, in which the Commission both initiates and finally adjudicates the Complaint against Microsoft, violates Microsoft’s Fifth Amendment Due Process right to adjudication before a neutral arbiter.

These administrative proceedings violate Microsoft’s Fifth Amendment Due Process right to adjudication before a neutral arbiter as applied to Microsoft because the Commission has prejudged the merits of the instant action.

The official response has now been amended to remove this claim, though. Microsoft spokesperson David Cuddy explained why to Axios:

The FTC has an important mission to protect competition and consumers, and we quickly updated our response to omit language suggesting otherwise based on the constitution. We initially put all potential arguments on the table internally and should have dropped these defenses before we filed. We appreciated feedback about these defenses and are engaging directly with those who expressed concerns to make our position clear.

It could be a strategy to appear less aggressive and find a way to settle the legal argument before it goes to court. The first pre-trial hearing happened three days ago, with FTC attorney James Weingarten stating on the record that there were no ‘substantive settlement talks’ between the parties at the time. Microsoft could be trying to remedy that, as the trial itself would commence in August, which is after the closure date set by Microsoft and Activision Blizzard for the $68.7 billion deal.

Analysts believe the deal will pass through with some additional concessions from Microsoft. In related news, UK regulator CMA (Competition and Markets Authority) has extended the window for its final decision until April 26th. The European Union will also deliver its decision in April (two weeks earlier).