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Published: June 14, 2023

Written by: Stefan Velikov

  • The US Federal Trade Commission wants the court to temporarily stop the deal
  • It states this is necessary to “prevent interim harm to competition”
  • Microsoft and Activision Blizzard senior staff seem positive about the development

Yet another governmental body is blocking Microsoft’s merger with gaming giant Activision Blizzard over concerns of monopolization of the market.

FTC Hinders Deal

The United States Federal Trade Commission is asking courts to temporarily stop the acquisition of gaming giant Activision Blizzard by Microsoft before the deal’s July 18 deadline. This was once again prompted by fears that the merger could lead to Microsoft withholding games from Activision Blizzard’s library from launching on other game consoles, like those sold by Sony.

“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’s complaint reads. “A preliminary injunction is necessary to maintain the status quo and prevent interim harm to competition during the pendency of the FTC’s administrative proceeding to determine whether the Proposed Acquisition violates U.S. antitrust law,” the governmental body argues.

When Microsoft announced its plans to purchase Activision Blizzard for $69 billion early last year, many raised concerns that the record-breaking merger could lead to the monopolization of a large part of the gaming market by the tech giant. Since the deal was announced, it has been in preparation ever since, with many government bodies from different countries, looking into the matter and often putting a temporary stop. One of the biggest hurdles Microsoft had to overcome in order to acquire Activision Blizzard was the UK’s Competition and Markets Authority which recently froze the deal as it conducted its research. 

The FTC is yet another challenge Microsoft must overcome, as a US judge will now need to decide on issuing a temporary restraining order to restrict Microsoft from closing the deal for two weeks. Meanwhile, a preliminary injunction will prevent Microsoft from closing until the result of the FTC’s legal challenge become apparent. 

If the FTC’s injunction is unsuccessful, then Microsoft is eager to fast-track the FTC case. “We always prefer constructive and amicable paths with governments but have confidence in our case and look forward to presenting it,” wrote on Twitter Microsoft’s vice chair and president Brad Smith.

His statement was echoed by Activision Blizzard CEO Bobby Kotick in an email to employees shared publicly. “This is a welcome update and one that accelerates the legal process,” Kotick’s message reads. “Our excellent legal team has been preparing for this move for more than a year, and we’re ready to present our case to a federal judge who can evaluate the transaction on the merits.”

Considering both companies’ senior staff see this as a positive development, it looks like the FTC’s temporary block should not be much of a hindrance to Microsoft’s goal of acquiring Activision Blizzard. If the deal eventually proceeded as planned, it would become the largest such deal in all of gaming history.

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