Microsoft’s $69 Billion Activision Blizzard Acquisition Frozen Amid FTC Lawsuit
The decision came a day after the FTC requested a federal judge to halt Microsoft's megadeal for Activision Blizzard while it mulls over potential regulatory action
The $69 billion acquisition of gaming company Activision Blizzard by Microsoft was temporarily halted on Tuesday, according to a court filing in the United States.
In his order, Judge Edward Davila said that “it is necessary to maintain the status quo” while the court decides whether or not to issue a permanent injunction on the transaction, as sought by the Federal Trade Commission (FTC).
According to the judgement, a hearing to hear evidence in the subject will take place on June 22 and 23 in federal court in San Francisco.
The decision came a day after the FTC requested a federal judge to halt Microsoft’s megadeal for Activision Blizzard while it mulls over potential regulatory action.
While the FTC investigates whether “the proposed acquisition violates US antitrust law,” it is “necessary to… prevent interim harm,” according to the complaint.
Before the court determines whether to give a preliminary injunction requested by authorities, the order issued on Tuesday prevents Microsoft from pushing ahead with the transaction.
The United States government filed for a preliminary injunction in a court in Northern California to block the corporations from closing the merger before the deadline of July 18.
A restraining order would prevent the agreement from going into effect until the FTC hearing on the merits of the arrangement, scheduled for August, has concluded.
After hearing arguments from both Microsoft and the FTC on why the acquisition should go through or be blocked, the California court would need to agree to halt the deal.
Microsoft President Brad Smith stated on Monday, “We welcome the opportunity to present our case in federal court.”
He also said that they expect more consumer freedom and market competitiveness as a result of speeding up the legal procedure in the United States.
Xbox-owner Microsoft made an offer to acquire Activision Blizzard at the beginning of last year in an effort to become the third largest gaming company in the world, after Tencent of China and Sony of Japan, in terms of sales.
Britain’s Competition and Markets Authority (CMA) banned the merger in April on the grounds that it will reduce competition in the cloud gaming market, despite the fact that the European Union has approved the transaction.
In December, the FTC filed suit to prevent the acquisition of Activision Blizzard, the company responsible for the massively successful “Call of Duty” video game franchise, due to worries that the deal would hurt competition.
Lina Khan, an antitrust professor and supporter of splitting up the largest digital businesses, was chosen to lead the agency by Vice President Joe Biden in 2021.
While the FTC has investigated Amazon, Khan has accused Facebook’s parent company, Meta, of limiting competition by buying up companies.
Meanwhile, the United States Department of Justice has filed litigation against Google, alleging that the company violated antitrust rules related to both internet search and advertising.