The Federal Trade Commission (FTC) has achieved a temporary victory in its efforts to halt Microsoft’s deal with Activision Blizzard. Reports from The Financial Times and Bloomberg reveal that a US federal judge has issued an order temporarily blocking the companies from finalizing their $68.7 billion agreement, pending a decision on the FTC’s request for a preliminary injunction. The agency filed for an injunction in response to reports indicating that the deal was nearing completion, with a target deadline of July 18th for the acquisition.
Judge Edward J. Davila has ruled that the merger cannot proceed until five days after the court has made a decision on whether to issue an injunction against it. The court is scheduled to hear the FTC’s request for an injunction on June 22nd and 23rd, meaning that the earliest the companies can proceed with their plans would be the end of this month, assuming the court does not side with the agency. The commission stated in its filing that Microsoft’s control over Activision’s content could lead to the withholding or degradation of Activision’s content, resulting in diminished competition in terms of product quality, price, and innovation.
Despite the FTC’s legal action, Microsoft and Activision Blizzard appear undeterred. Microsoft issued a statement asserting that the injunction request is actually expediting the legal process, facilitating the merger’s progress. A Microsoft spokesperson told The Times that a temporary restraining order is sensible until a decision is reached by the court, which is moving swiftly.
In May, the European Union granted approval for the acquisition, provided that Microsoft committed to making popular Activision Blizzard games available on competing cloud gaming services. However, the companies must still gain approval from US and UK authorities to proceed with the merger. In December 2022, the FTC filed an antitrust complaint to block the deal, expressing concerns that it would enable Microsoft to stifle competitors to its Xbox gaming consoles and its rapidly growing subscription content and cloud gaming business. The lawsuit was filed in the agency’s in-house court, and the commission’s administrative law judge is scheduled to hear the case in August.
