Judge blocks Microsoft’s $69 billion acquisition of Activision-Blizzard 2023

A federal magistrate in California temporarily halted Microsoft’s $69 billion acquisition of American gaming giant Activision-Blizzard, stating that “it is necessary to maintain the status quo.”

Until the court decides whether to issue a preliminary injunction requested by regulators, the ruling prevents both parties from proceeding with the transaction.

The case will be heard again on June 22 and June 23 in federal court in San Francisco, according to the ruling.

Microsoft and Activision must submit legal arguments opposing a preliminary injunction by June 16, while the FTC must respond by June 20.

Microsoft’s deal faces regulatory obstruction

The US government sought a preliminary injunction from the Northern California District Court to prevent the corporations from finalizing the transaction prior to the July 18 deadline.

A FTC hearing on the merits of the agreement is scheduled for August, and a restraining order would halt the agreement prior to the conclusion of that proceeding.

The California magistrate must agree to halt the transaction after hearing the FTC’s and Microsoft’s arguments as to why the acquisition is illegal.

FTC’s objection to the transaction

It comes a day after the FTC filed an emergency motion to suspend the merger in its in-house court, arguing that the merger would “substantially lessen competition” in the industry.

“A preliminary injunction is necessary to… prevent interim harm” while the FTC determines whether “the proposed acquisition violates U.S. antitrust law,” according to the filing.

The US regulator has argued that the agreement gives Microsoft’s Xbox console exclusive access to Activision titles, thereby posing a threat to Nintendo and Sony’s consoles.

Microsoft has stated that the arrangement would benefit both consumers and gaming companies, and has even offered to sign a legally binding contract with the FTC to provide Call of Duty games to competitors for a decade.

The Microsoft-Activision transaction has divided global regulators, and for the transaction to proceed, the parties require sanction from regulatory authorities in the United Kingdom, the European Union, and the United States.