Microsoft-Activision Acquisition Deal Temporarily Blocked by US Judge

Microsoft acquired another obstacle in its acquisition of Activision.

The popular tech giant recently had its acquisition deal with video game developing company Activision blocked by a US federal judge through a temporary restraining order (TRO) the following the FTC's injunction filing.

The FTC filed the injunction and TRO requested the court to block Microsoft's acquisition from closing as scheduled.

FTC Blocking Details

US federal judge Edward J. Davila had issued an order that temporarily prevents Microsoft and Activision from closing their $68.7 billion acquisition deal due to a technicality, per Engadget. According to the judge, the merger can't occur until five days after the court has decided if it should issue an injunction against it.

For context, Microsoft and Activision's acquisition deal was scheduled to close in the Fiscal year 2023; the deal could have closed as soon as the end of this week, per the FTC's filing.

Davila also mentioned that the blocking is necessary to maintain the status quo while the FTC's complaint is pending. Thanks to the court's block, Microsoft and Activision now have until June 16 to submit legal arguments to oppose a preliminary injunction, while the FTC will have to reply to Microsoft's arguments on June 20.

The FTC is eager to block Microsoft's acquisition of Activision as it believes it would give the former's Xbox platform exclusive access to Activision games, removing the possibility of those games being played on Nintendo and Sony's gaming consoles, per the BBC.

The FTC also believes that Microsoft would have the ability and "increased incentive" to withhold or degrade Activision's content that would substantially lessen competition, such as in pricing, quality, and innovation.

Furthermore, the FTC claims that the acquisition could lead to alterations to Activision's operations and business plans, allowing Microsoft to access sensitive business information.

Microsoft And Activision's Stand

Meanwhile, Microsoft and Activision don't seem to be concerned with the FTC's lawsuit. Microsoft claims that the FTC's injunction request is "accelerating the legal process" that helps the merger to move ahead sooner; a spokesperson claims that the TRO makes sense until Microsoft can receive a decision from the court, which is "moving swiftly."

The companies have had victories worldwide, though it had experienced its fair share of defeats. While the EU approved the acquisition deal, the UK's Competition and Markets Authority (CMA) blocked it as Microsoft would find it commercially beneficial to make Activision's games exclusive to its cloud gaming service.

The BBC stated in its report that for Microsoft to push through with its acquisition deal with Activision, it first has to acquire the approval of the FTC, CMA, and the EU's regulatory body. As previously stated, it has only acquired the approval of the EU.

Microsoft had repeatedly assuaged the FTC and CMA's concerns since late 2022 in its blog posts, proposals, deals, and meetings with regulatory heads. Microsoft has already sent its appeal to the CMA to reconsider its decision to block its acquisition deal with Activision.