US judge temporarily blocks Microsoft’s acquisition of Activision

WASHINGTON, June 13 (Reuters) – A U.S. judge late on Tuesday granted a Federal Trade Commission (FTC) request to temporarily block Microsoft Corp’s ( MSFT.O ) takeover of video game maker Activision Blizzard ( ATVI.O ) and set up a further hearing. week.

U.S. District Judge Edward Davila has scheduled a two-day evidentiary hearing on the FTC’s request for a preliminary injunction for June 22-23 in San Francisco. Without the court order, Microsoft could have closed the $69 billion deal as early as Friday.

The FTC, which enforces antitrust laws, asked an administrative judge to block the transaction in early December. An evidentiary hearing in the administrative action is scheduled to begin on August 2.

Based on a hearing in late June, a federal court will decide whether a preliminary injunction — which will last during an administrative review of the case — is necessary. The FTC sought a temporary injunction on Monday.

Davila said Tuesday’s temporary injunction is “necessary to maintain the status quo while the complaint is pending (and) preserve this court’s ability to order effective relief if the preliminary injunction is determined and the FTC’s ability to obtain an effective permanent remedy if it prevails in the pending administrative proceedings.” “

Microsoft and Activision have until June 16 to submit legal arguments challenging the preliminary injunction; The FTC is due to respond on June 20.

Activision declined to comment Tuesday, saying the FTC’s decision to seek a federal court order on Monday was “a welcome update and one that speeds up the legal process.”

Activision Blizzard’s games characters show the Microsoft logo in this illustration taken on January 18, 2022. REUTERS/Dado Ruvic/Illustration

Microsoft said on Tuesday that “speeding up the legal process in the US will ultimately bring more choice and competition to the gaming market. A temporary injunction would make sense until we get a decision from the court, which is moving quickly.”

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The FTC declined to comment.

Davila said the closure stay will remain in place for at least five days until the court rules on the preliminary injunction request.

The FTC argued that the transaction would give Microsoft’s video game console Xbox exclusive access to Activision games, leaving Nintendo’s ( 7974.T ) consoles and Sony Group Corp’s ( 6758.T ) PlayStation out in the cold.

Microsoft’s bid to acquire the “Call of Duty” video game maker was approved by the European Union in May, but British competition authorities blocked the acquisition in April.

Microsoft has said the deal will benefit gamers and gaming companies alike, and has offered to sign a legally binding consent decree with the FTC to offer “Call of Duty” games to rivals including Sony for a decade.

The case reflects the muscular approach to antitrust enforcement taken by US President Joe Biden’s administration.

David Shepherdson reports; Editing: Muralikumar Anantharaman, Leslie Adler and Jerry Doyle

Our Standards: Thomson Reuters Trust Principles.

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