US Judge Temporarily Blocks Microsoft Acquisition of Activision

A US judge has granted the Federal Trade Commission’s (FTC) request to temporarily block Microsoft Corp’s acquisition of Activision Blizzard, a video game maker.

The judge, Edward Davila, scheduled a two-day evidentiary hearing on the FTC’s request for a preliminary injunction to take place on June 22-23 in San Francisco. Without the court order, Microsoft could have closed the $69 billion deal as early as Friday.

The FTC, responsible for enforcing antitrust law, initially sought to block the transaction in early December and has an administrative proceeding scheduled to begin on August 2.

Based on the upcoming hearing in late June, the federal court will determine if a preliminary injunction, lasting throughout the administrative review, is necessary. The FTC requested the temporary block on Monday.

Judge Davila stated that the temporary restraining order issued is crucial to maintaining the status quo while the complaint is pending.

It ensures the court’s ability to order effective relief if a preliminary injunction is deemed necessary and allows the FTC to obtain a permanent remedy if it prevails in the pending administrative proceeding.

Microsoft and Activision have until June 16 to submit legal arguments opposing the preliminary injunction, while the FTC must reply by June 20.

Activision refrained from commenting following their statement acknowledging the FTC’s decision to seek a federal court order.

Microsoft expressed their belief that accelerating the legal process will bring more choice and competition to the gaming market, stating that a temporary restraining order is sensible until a decision is reached swiftly by the court.

Davila clarified that the prohibition on closing the deal will remain in effect for at least five days after the court rules on the preliminary injunction request.

The FTC has argued that the acquisition would grant Microsoft’s Xbox console exclusive access to Activision games, potentially leaving Nintendo and Sony’s PlayStation consoles at a disadvantage.

While the deal received approval from the EU in May, British competition authorities blocked the takeover in April.

Microsoft has emphasized that the acquisition would benefit gamers and gaming companies alike and has offered to sign a legally binding consent decree with the FTC, ensuring that “Call of Duty” games are available to rivals, including Sony, for a decade.

This case highlights the robust approach to antitrust enforcement pursued by the administration of US President Joe Biden.