Microsoft’s Activision Acquisition Blocked by US Judge

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Microsoft’s Activision Acquisition Blocked by US Judge

A U.S. judge granted the Federal Trade Commission’s (FTC) request for a temporary block on Microsoft’s acquisition of Activision Blizzard late on Tuesday.

The FTC filed the request for a restraining order and injunction on Monday in order to stop the deal prior to its deadline on July 18. Reuters reported that without this court order Microsoft could have closed the deal as soon as tomorrow, but now they will now have to wait for an evidentiary hearing on the FTC’s request on June 22-23.

At the hearing later this month, the court will decide whether or not to block Microsoft’s acquisition until the FTC completes its own administrative review of the case, something the agency sued for last december. The FTC’s administrative review is set to begin August 2, which is after the acquisition’s current deadline. If the court decides to grant the FTC’s request for a longer block, the deal would miss this deadline, which could lead to a substantial financial loss for Microsoft.

U.S. District Judge Edward Davila, who made the decision on Tuesday, told Reuters that the temporary block was a necessary step to ensure that both the regulator and the court are able to address the case effectively. 

“[The restraining order] is necessary to maintain the status quo while the complaint is pending (and) preserve this court’s ability to order effective relief in the event it determines a preliminary injunction is warranted and preserve the FTC’s ability to obtain an effective permanent remedy in the event that it prevails in its pending administrative proceeding,” Davila said.

Representatives for Microsoft spoke in favor of the hearing as a means to ensure the quick conclusion of the legal processes surrounding the deal.

“Accelerating the legal process in the U.S will ultimately bring more choice and competition to the gaming market,” they said. “A temporary restraining order makes sense until we can receive a decision from the court, which is moving swiftly.”

Microsoft’s acquisition has been under harsh scrutiny from regulators internationally since it was first announced early last year, with many raising concerns of anticompetition as the deal could bar Activision Blizzard’s lucrative games from appearing on Nintendo and Sony platforms and could lead to monopolization in spheres such as cloud gaming. This past spring, the deal was approved by EU regulators but blocked in the UK.

Microsoft and Activision must submit legal arguments by tomorrow, to which the FTC must respond by June 20 ahead of the hearings.

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