The Federal Trade Commission (FTC) has managed a provisional victory in its effort to halt Microsoft from finalizing its agreement with Activision Blizzard. The Financial Times and Bloomberg report that a US federal judge has issued a ruling temporarily preventing the firms from wrapping up their $68.7 billion transaction while the court deliberates on the FTC’s request for an initial injunction. This was in response to reports that the companies were on the verge of closing the deal, with a set target date of July 18th for the acquisition.
Judge Edward J. Davila decided that the merger could not occur until five days after the court’s decision on the potential injunction. Importantly, the court is set to consider the FTC’s injunction request on June 22nd and 23rd. Consequently, the earliest the companies could carry on with their plans is at the end of June, provided the court doesn’t rule in favor of the FTC. The commission mentioned in its filing:
“By controlling Activision’s content, Microsoft could have the capacity and heightened motivation to limit or degrade Activision’s content, significantly undermining competition, including competition on aspects such as product quality, price, and innovation.”
Despite the FTC’s legal action, Microsoft and Activision Blizzard appear unbothered. Microsoft stated that the injunction request is “speeding up the legal process,” which will aid in the merger’s expedited realization. “A temporary restraining order is practical until we can receive a court decision, which is proceeding quickly,” a representative shared with The Times.
Subscribe to BuyTechBlog’s Deals Newsletter
Get top deals on consumer electronics sent directly to your inbox, handpicked by the BuyTechBlog editorial team. See the latest.
In May, the European Union greenlit the acquisition provided that Microsoft agreed to release popular Activision Blizzard games on rival cloud gaming services. However, the companies still need to persuade US and UK regulators to let the merger proceed. The FTC lodged an antitrust complaint in December 2022 to obstruct the deal, fearing that it “would allow Microsoft to stifle competition to its Xbox gaming consoles and its rapidly expanding subscription content and cloud-gaming business.” This lawsuit was filed in the agency’s internal court, with a hearing by the commission’s administrative law judge scheduled for August.
Frequently Asked Questions (FAQs) about Microsoft-Activision Merger
What is the current status of the Microsoft-Activision Blizzard merger?
The current status of the Microsoft-Activision Blizzard merger is temporarily halted by a US judge. The companies are awaiting a decision on the FTC’s request for a preliminary injunction.
Why was the merger temporarily blocked?
The merger was temporarily blocked due to the Federal Trade Commission’s concerns about competition. The FTC has filed for an injunction, citing potential negative impacts on product quality, price, and innovation.
When can the companies proceed with their merger plans?
The companies can proceed with their merger plans after the court’s decision on the FTC’s injunction request. The court is scheduled to hear the request on June 22nd and 23rd, with a potential outcome by the end of this month.
Has the European Union approved the merger?
Yes, the European Union has approved the merger, subject to certain conditions. Microsoft agreed to make popular Activision Blizzard games available on competing cloud gaming services as part of the approval.
How are Microsoft and Activision Blizzard responding to the FTC’s lawsuit?
Microsoft and Activision Blizzard appear to be unperturbed by the FTC’s lawsuit. They view the injunction request as a means to expedite the legal process and anticipate a swift court decision to move the merger forward.