Shubham Sawarkar
The Federal Trade Commission (FTC) has taken a significant step in its efforts to block Microsoft‘s acquisition of Activision Blizzard. The regulatory body has requested a temporary restraining order and injunction from a US federal district court to prevent the merger from proceeding while the larger case against it is being litigated. The FTC initially filed a legal challenge in December to oppose Microsoft’s proposed acquisition of the gaming giant.
The complaint filed by the FTC states, “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.” This move by the FTC comes at a crucial juncture as Microsoft is currently appealing against the decision by UK regulators to block the merger. With the July 18th deadline for the deal approaching, the FTC’s concerns revolve around Microsoft’s potential intentions to close the acquisition despite regulatory obstacles.
The timing of the complaint is strategic, aiming to address Microsoft’s potential disregard for the UK’s block on the deal. While European regulators have given their approval, allowing the merger to proceed without the UK’s participation and without an injunction in the US would be a significant blow to the FTC’s efforts.
Citing press reports that suggested Microsoft and Activision Blizzard were considering closing the acquisition despite the ongoing legal challenges, the FTC argues that it had no choice but to seek an injunction. The regulatory body’s appeal against the decision by the UK’s Competition and Markets Authority (CMA) is ongoing, further complicating the situation and adding urgency to the FTC’s actions.
The US judge now faces the task of deciding whether to issue a temporary restraining order that would prevent Microsoft from closing the deal for two weeks, as well as a preliminary injunction that would halt the acquisition until the resolution of the FTC’s legal challenge. An evidentiary hearing has been scheduled for August 2nd, shortly after Microsoft’s appeal hearing in the UK.
In the event that the FTC’s injunction is unsuccessful, Microsoft is eager to expedite the legal process. Brad Smith, Microsoft’s vice chair and president, stated, “We welcome the opportunity to present our case in federal court. We believe accelerating the legal process in the US will ultimately bring more choice and competition to the market.” Activision Blizzard CEO Bobby Kotick echoed this sentiment in an email to employees, expressing optimism about the FTC’s actions and emphasizing that they would accelerate the merger process.
As this legal battle unfolds, the fate of Microsoft’s acquisition of Activision Blizzard remains uncertain. The outcome of the FTC’s efforts to secure an injunction will significantly impact the timeline and viability of the deal.
