Responding to the Federal Trade Commission’s complaint regarding its ongoing effort to acquire Activision Blizzard,Microsoftis feigning ignorance regarding certain obvious details regardingCall of Duty.Microsoft’s acquisition of Activision Blizzard has not gone smoothly, to say the least. Given the size of the acquisition, a staggering $68.7 billion, extensive analysis is expected. The FTC’s decision to try and block Microsoft’s acquisition effort, however, has led to an increasingly odd and complicated scenario.In early December, the FTC officially kicked off its effort to blockMicrosoft’s acquisition of Activision Blizzardin the United States. This is a legal effort by the FTC to argue that the acquisition violates US law. Microsoft will be able to argue its case for why the acquisition should go through and has indicated it plans to do so. When and in what court that will happen is a more complicated matter. Nevertheless, Microsoft has already responded to the FTC’s complaint, which has drawn some curious reactions.RELATED:Chile Approves Microsoft Activision-Blizzard AcquisitionThe 37-page response from Microsoft to the FTC’s complaint includes a significant number of denials, admittances, and “respectful” requests to the Court. One statement, in particular, is drawing a lot of recent attention, though. The comment reads, “Microsoft avers that it lacks knowledge or information sufficient to form a belief as to the truth of allegations concerning industry perceptions ofCall of DutyandCall of Duty’s original release date; or as to the truth of the allegations concerningCall of Duty’s launch and typical release schedule and the resources and budget Activision allocates toCall of Duty, including the number of studios that work onCall of Duty.” The idea is that Microsoft is being mocked for feigning ignorance regardingCall of Duty’s release detailsand other obviousCall of Dutyinformation. The truth of the situation is a little bit more complicated.
This section of Microsoft’s response addresses a specific paragraph in the FTC’s complaint, paragraph 6 of its “Nature of the Case.” In this paragraph, the FTC alleges that “Activision and industry participants recognizeCall of Dutyas Activision’s ‘key product franchise.‘Call of Dutywas originally launched in 2003, and Activision releases new titles for the franchise on an annual basis. Activision allocates substantial resources to the franchise. As many as [REDACTED] primary development studios are devoted to it at any one time and its budget is significantly larger than other AAA titles.” What’s important to know is that the FTC cites this paragraph as part of its explanation for attempting toblock Microsoft’s acquisitionof Activision Blizzard. It’s key to the FTC’s argument.
While it may seem like Microsoft is trying to muddy the waters, feigning ignorance regardingCall of Duty’s release details and financials, that’s clearly not the goal. Rather, Microsoft is stating to the court that what the FTC is saying here isn’t clear enough to agree with or deny. Just as a few examples,Call of Dutyisn’t always released annually, “substantial resources” is ambiguous to a fault, multiple studios work on different games and not all on a single game, and whileCall of Dutygame budgets are expensive, they’re not the most expensive AAA games. The FTC will have to clarify these details in front of the court.
This is just one part of Microsoft’s effort to begindismantling the FTC’s legal case. If Microsoft can prove that the FTC’s case is built on incorrect information and assumptions, US courts will have to allow the acquisition to go through. What the courts think of the FTC’s claims andMicrosoft’s response won’t be known for months yet. The Activision Blizzard acquisition is only going to get more complicated from here.
