This article has been updated to reflect the judge’s decision on Tuesday, June 13.
A U.S. judge has granted a request by the Federal Trade Commission (FTC) to put a temporary block on Microsoft proceeding with its $69 billion bid to acquire Activision Blizzard.
The court said on Tuesday that the temporary restraining order “is necessary to maintain the status quo while the complaint is pending,” the BBC reported.
The FTC had also asked for an injunction that would allow it to present its case against the acquisition before it could go through, and U.S. District Judge Edward Davila said the court will consider this during a two-day hearing starting June 22. Davila added that the block on closing the deal will remain in place until at least five days after the court rules on the preliminary injunction request.
“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 said in a filing on Monday. The U.S. regulator added that if the deal goes through before its own hearing involving Microsoft on August 2, then it would be difficult to undo.
A delay would also mean that Microsoft’s appeal to the U.K.’s Competition and Markets Authority, which blocked the deal in April over concerns that it could negatively impact the nascent cloud gaming market, would be heard before the deal’s July 18 deadline. European Commission regulators gave the deal the nod in May, saying it was happy with Microsoft’s reassurances over antitrust concerns linked to cloud gaming.
The proposed acquisition deal would be Microsoft’s priciest acquisition and the biggest ever in the video game industry, but the FTC isn’t happy about it.
The regulator has concerns that a Microsoft-owned Activision would give the computer giant an unfair advantage over rivals, and as a consequence moved to block the deal in December 2022.
The FTC’s filing with a California court on Monday described Microsoft as having the “ability and increased incentive to withhold or degrade Activision’s content in ways that substantially lessen competition, including competition on product, quality, and innovation.”
In real terms, that could mean Microsoft preventing popular Activision titles from launching on the Sony PlayStation, or, if they did launch, offering fewer features than those released for Microsoft’s Xbox.
Microsoft insists that taking over Activision would be advantageous for both the gaming industry and gamers, and has even offered to put its name to a legal document that promises the availability of games like Call of Duty on other consoles for a decade.
If Microsoft fails in its bid to acquire Activision Blizzard, it could face a termination fee of as much as $3 billion.
