Microsoft-Activision Blizzard merger temporarily blocked by US judge

The FTC has notched a win, albeit a temporary one, in its bid to prevent Microsoft from closing its deal with Activision Blizzard. According to The Financial Times and Bloomberg, a US federal judge has issued an order that temporarily blocks the companies from finalizing their $68.7 billion deal while waiting for the court to decide on the FTC’s request for a preliminary injunction. If you’ll recall, the agency has filed for an injunction in response to news reports that the companies were closing the deal “imminently” and that they had set July 18th as the target deadline for the acquisition.

Judge Edward J. Davila has ruled that the merger can’t take place until five days after the court has decided on whether or not to issue an injunction against it. To note, the court is scheduled to hear the FTC’s request for an injunction on June 22nd and 23rd, so the earliest the companies can proceed with their plans is the end of this month — if the court doesn’t ultimately side with the agency. The commission said in its filing:

“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 — including competition on product quality, price, and innovation.”

Microsoft and Activision Blizzard, however, seem to be unperturbed by the FTC’s lawsuit. In a statement, Microsoft told us that the injunction request is “accelerating the legal process” that will help the merger move forward sooner. “A temporary restraining order makes sense until we can receive a decision from the court, which is moving swiftly,” a spokesperson also told The Times. 

In May, the European Union approved the acquisition, as long as Microsoft agreed to release popular Activision Blizzard games on competing cloud gaming services. But the companies still have to convince US and UK authorities to allow the merger to push through. The FTC filed an antitrust complaint in December 2022 to block the deal over worries that it “would enable Microsoft to suppress competitors to its Xbox gaming consoles and its rapidly growing subscription content and cloud-gaming business.” That particular lawsuit was filed at the agency’s in-house court, and the commission’s administrative law judge is scheduled to hear the case in August.