Microsoft Corp CEO Satya Nadella stops by Bloomberg during the opening day of the World Economic Forum (WEF) in Davos, Switzerland, Tuesday, Jan. 21, 2020.
Simon Dawson | Bloomberg | Getty Images
The U.S. Federal Trade Commission on Monday applied for a temporary restraining order and preliminary injunction in an attempt to block Microsoft’s acquisition of Activision Blizzard before the July 18 deal deadline.
CNBC reported on the FTC’s plans earlier in the day.
“Pending the pending administrative proceeding with the FTC to determine whether a proposed acquisition violates U.S. antitrust law, a preliminary injunction is necessary to preserve the status quo and prevent temporary injury to competition,” the FTC said in a filing. During the requested preliminary injunction, a temporary restraining order is necessary to maintain the status quo.”
Microsoft Announcement of Intent to Acquire Activision Blizzard A $68.7 billion acquisition in January 2022 would be the largest deal to date. At the time, the software maker said it expected to close the deal by the end of June 2023. If the deal falls apart, Microsoft could end up owing Activision Blizzard as much as $3 billion in termination fees.
“We welcome the opportunity to present our case in federal court,” said Microsoft President Brad Smith. “We believe that expediting the legal process in the United States will ultimately bring more choice and competition to the marketplace.”
Microsoft has been dealing with regulatory opposition to the deal for months, notably from Britain’s Competition and Markets Authority and the U.S. Federal Trade Commission. Hearings in the FTC case will begin on Aug. 2, the agency said in a Monday filing.
Microsoft President and Vice Chairman Brad Smith was due to meet with British Prime Minister Jeremy Hunt last week about the deal, Bloomberg The report quoted unnamed sources as saying.
The European Union’s executive body approved the deal in May initially said It fears the deal will reduce competition. Regulators initially believed that Microsoft might be able to prevent other companies from distributing Video Blizzard games, such as Call of Duty, on consoles other than Microsoft’s Xbox.
Microsoft offered Sony, its arch-rival in the console space, a ten-year contract to make every Call of Duty game available on Sony’s PlayStation while the Xbox gets the title. But Sony didn’t accept it.
“I don’t want a new Call of Duty deal. I just want to stop you guys from merging,” Sony Interactive Entertainment president and CEO Jim Ryan said, according to one tweet From Activision Blizzard exec Lulu Cheng Meservey.
But unlike Sony, EU regulators have changed their minds.
“Even if Microsoft did decide to pull Activision’s games from the PlayStation, it would not significantly harm competition in the console market,” they said last month.
The EU also initially worried that Microsoft might prevent other companies from offering Activision Blizzard games through a cloud-based streaming service that competes with Microsoft’s Game Pass. But as part of the decision to approve the deal, they said Microsoft would offer a free 10-year license to the cloud-based streaming service, enabling people in the European Economic Area to stream Activision Blizzard PC and console games.
The story is developing. Please check for updates.
watch: Microsoft CEO Satya Nadella on the OpenAI relationship, generative AI, the Microsoft-Activision deal
