Microsoft’s Activision Blizzard buyout has been halted after an injunction filed by the FTC was granted in court.
Update: The Federal Trade Commission’s restraining order, aimed to temporarily prevent Microsoft from closing its Activision Blizzard deal, has been granted by a court in California, reports The Verge.
The ruling means that Microsoft will, for now, be unable to complete its proposed acquisition of Activision Blizzard, worth somewhere in the region of $69 billion. The injunction means that “Microsoft and Activision shall not close or consumate their proposed transaction or a substantially similar transaction until after 11:59pm Pacific Time on the fifth business day after the court rules on the FTC’s request… or a date set by the Court, whichever is later.”
All parties involved will get to argue their case later this month, with a hearing scheduled for 22 and 23 June in a San Francisco courtroom. Microsoft’s deal with Activision Blizzard has a deadline – 18 July – and as The Verge also notes, there could be an expense attached if that date is missed. Assuming both parties don’t agree to extend the deadline, Microsoft will owe Activision Blizzard $3 billion termination bill.
Our original story follows…
13 June 2023: It’s the latest chapter in an ongoing saga worth billions of dollars. In the United States, the Federal Trade Commission (FTC) has gone to a court in California with a restraining order, designed to temporarily prevent the deal from going ahead.
The news came to light via a court filing spotted by VGC, which requests a “preliminary injunction” to prevent Microsoft from “consummating their proposed acquisition” of Activision Blizzard.
The FTC has long been opposed to the deal, having already filed a lawsuit which sought to block the deal in December 2022. The commission’s argument is that the acquisition would “enable Microsoft to suppress competitors to its Xbox gaming consoles and its rapidly growing subscription content and cloud-gaming business.”
It’s a sentiment broadly shared by the UK’s Competition and Markets Authority, which blocked the takeover in April this year. Microsoft is currently in the process of appealing that verdict, and argues that the CMA made “fundamental errors” during the process of making its verdict.
Elsewhere in the world, regulatory bodies have waved the proposal through – one clear landmark was the European Commission’s approval in mid-May. Microsoft has also suggested that it could take the extreme step of withdrawing Activision from the UK entirely (assuming the deal goes ahead, of course) or simply ignoring the CMA’s ruling.
The FTC’s latest move could prove to be a difficult one to get around, though, assuming it’s granted – the FTC has requested that its latest block be put in place by 15 June.
“Both a temporary restraining order and a preliminary injunction are necessary because Microsoft and Activision have represented that they may consummate the proposed acquisition at any time,” the FTC states in the complaint above. “With control of Activision’s content, Microsoft would have the ability and increased incentive to withhold or degrade Activision’s content in ways that substantially lessen competition.”
Microsoft’s deal, worth around $69 billion, would be the biggest such acquisition in history if it goes ahead. The deal’s deadline is 18 July; whether Microsoft can get around this latest roadblock in time remains to be seen.
