FTC takes action to prevent Microsoft-Activision deal as deadline nears.

FTC takes action to prevent Microsoft-Activision deal

The Federal Trade Commission (FTC) has taken steps to prevent the acquisition of Activision Blizzard by Microsoft by filing for a temporary restraining order and preliminary injunction. The deadline for the deal is July 18, and the FTC is concerned that if Microsoft acquires Activision, it would have the power to manipulate Activision’s gaming products. This could include withholding popular games from launching on other consoles or charging higher prices for games on those platforms. The FTC believes that reestablishing the status quo would be difficult or impossible if the merger were allowed before the case’s administrative proceeding.

The injunction request comes as the deadline for the deal approaches, and both the FTC’s hearing and an appeal by the UK Competition and Markets Authority are scheduled after July 18. However, European Commission regulators have already cleared the acquisition. The FTC argues that a preliminary injunction is necessary because Microsoft and Activision have indicated that they may proceed with the acquisition at any time.

Microsoft announced its intention to acquire Activision Blizzard for $68.7 billion in January 2022, and the deal was expected to be completed by the end of June 2023. If the deal falls through, Microsoft may owe Activision Blizzard a termination fee of up to $3 billion. The FTC filed a lawsuit in December 2022 to block the acquisition and opted for an internal administrative law judge to handle the case. The hearing for the FTC’s case is scheduled to begin on August 2.

Microsoft President Brad Smith welcomed the opportunity to present the case in federal court, believing that it will bring more choice and competition to the market. Activision Blizzard CEO Bobby Kotick expressed his readiness to present their case to a federal judge, stating that their legal team has been preparing for this for over a year.

Microsoft President Brad Smith was reportedly scheduled to meet with UK Chancellor Jeremy Hunt regarding the deal. In May, the European Union approved the acquisition after initially expressing concerns about reduced competition. Microsoft had offered Sony, its main console rival, a ten-year contract to release every Call of Duty game simultaneously on the Sony PlayStation and Xbox, but Sony has not accepted the offer.