Microsoft files a revised rebuttal to the FTC's lawsuit to block its Activision Blizzard deal, removing its claim that the FTC's structure is unconstitutional
Microsoft says it made a mistake last month when it claimed that the very structure of Federal Trade Commission …
Context & Ripple Effects
Microsoft’s revised filing narrows the defense it presented in its initial rebuttal to the FTC’s challenge, which argued the Activision deal would not harm competition. The FTC’s planned lawsuit had already put the proposed $69 billion acquisition under an antitrust lens rather than a simple transaction-review process.
Removing the constitutional argument leaves Microsoft’s public court response more tightly centered on the competitive merits the FTC staff had questioned when the case was being prepared.
First-order effects
- Microsoft withdraws its claim that the FTC’s structure is unconstitutional, avoiding that line of argument in its defense of the Activision Blizzard acquisition.
- The FTC can address Microsoft’s revised rebuttal without litigating a constitutional challenge alongside its competition case.
Second-order effects
- The parties’ dispute becomes more concentrated on whether the acquisition harms competition, the core issue raised in the FTC’s planned antitrust lawsuit.
- Activision Blizzard remains exposed to a review process whose outcome turns on the transaction’s competitive rationale rather than a challenge to the agency’s authority.
Third-order effects
- The filing signals that large technology acquisitions can be contested through prolonged, merits-focused regulatory litigation; later coverage shows the FTC revived its challenge after the deal closed.
- Where multiple regulators scrutinize a transaction, companies may need to adapt deal structures as well as defend them in court, as Microsoft later negotiated restructuring with the UK CMA.
The trend: Big technology mergers are increasingly shaped by regulator-by-regulator litigation and transaction restructuring rather than a single definitive clearance decision.