Categories: Regulation

US FTC Seeks Injunction Blocking Microsoft-Activision Deal

The US competition regulator has moved to block Microsoft from completing its $68.7 billion (£55bn) acquisition of Activision Blizzard, as it pursues legal action over the deal.

The Federal Trade Commission (FTC) late on Monday applied for a temporary restraining order and preliminary injunction ahead of a 18 July deadline agreed by the two firms to close the deal.

If Microsoft fails to complete the deal, which was originally announced in January 2022, it could end up owing Activision Blizzard a termination fee of up to $3bn.

The FTC told the District Court for the Northern District of California that a preliminary injunction was necessary “because Microsoft and Activision have represented that they may consummate the Proposed Acquisition at any time”.

Image credit: Suludan Diliyaer/Pexels

Injunction

If Microsoft were to carry out the acquisition it would be “would be difficult, if not impossible” to reestablish the status quo at a later date, should the FTC’s challenge succeed.

The FTC’s hearing date, and the date of an appeal by Microsoft of the UK’s Competition and Markets Authority (CMA) to block the deal, both come after the 18 July deadline.

The deal, which would be the biggest in the history of the videogame industry, has divided regulators over whether it would diminish competition and harm consumers.

Microsoft is seeking to use the deal to gain an edge over market leader Sony, whose PlayStation competes with Microsoft’s Xbox.

Regulators divided

European Union regulators initially expressed concerns, but approved the deal in May after Microsoft offered ten-year licensing deals to rivals. Sony has not accepted such a deal.

Meanwhile the UK’s CMA blocked the deal in April, citing potential harm to the nascent market for cloud gaming, a decision Microsoft is challenging in court.

The FTC’s case, initially filed in December 2022, is due to be heard in August.

Matthew Broersma

Matt Broersma is a long standing tech freelance, who has worked for Ziff-Davis, ZDnet and other leading publications

Recent Posts

Elon Musk Appeals To Advertisers, Backtracks Over Notorious Outburst

Wooing advertisers back? Elon Musk says his remark telling advertisers to “go f--- yourself” did…

11 hours ago

US Urges Netherlands, Japan To Increase Chip Kit Restrictions For China

American official heads to Japan after Dutch meeting, as US seeks to increase restrictions on…

12 hours ago

UK Investigates HPE’s $14bn Acquisition Of Juniper Networks

UK competition regulator begins investigation into the multi billion dollar acquisition of Juniper Networks by…

13 hours ago

Fisker Files For Chapter 11 Bankruptcy

EV maker Fisker files for bankruptcy protection in the US – the second EV venture…

14 hours ago

Nvidia Overtakes Microsoft As Most Valuable Tech Firm

Nvidia dethrones Microsoft as world's most valuable tech firm, in ongoing market capitalisation battle of…

18 hours ago

Apple Drops ‘Buy Now, Pay Later’ Service

Apple sunsets its buy now, pay later service known as 'Apple Pay Later', and will…

19 hours ago