Microsoft's $69 billion acquisition of ‘Call of Duty’ maker Activision Blizzard temporarily blocked

US District Judge Edward Davila granted the Federal Trade Commission's (FTC) request to temporarily halt Microsoft's acquisition of video game maker Activision Blizzard late on Tuesday. The judge also scheduled a two-day evidentiary hearing on the FTC's request for a preliminary injunction, which will take place on June 22-23 in San Francisco. Without the court order, Microsoft could have finalised the $69 billion deal as early as Friday.

The FTC, responsible for enforcing antitrust law, initially sought to block the transaction in early December and an evidential hearing in the administrative proceeding is set to commence on August 2.

Following the late-June hearing, the federal court will determine whether a preliminary injunction, lasting for the duration of the administrative review, is necessary. The FTC filed for the temporary block on Monday.

Judge Davila stated that the temporary restraining order issued on Tuesday is necessary to maintain the status quo while the complaint is pending. It ensures the court's ability to order appropriate relief if a preliminary injunction is deemed warranted, as well as preserving the FTC's ability to obtain an effective permanent remedy if it prevails in the ongoing administrative proceeding.

Microsoft and Activision are required to submit legal arguments opposing the preliminary injunction by June 16, with the FTC given until June 20 to respond.

Activision responded on Monday, expressing its support for the FTC's decision to seek a federal court order and its impact on expediting the legal process. However, the company declined to comment further on Tuesday.

Microsoft, on the other hand, stated on Tuesday that accelerating the legal process in the US would ultimately introduce more choice and competition to the gaming market. The company believes that a temporary restraining order is sensible until a decision from the court is reached, noting the court's swift progress in handling the case.

Judge Davila underscored that the restriction on finalising the deal will continue to be enforced for a minimum of five days following the court's decision on the preliminary injunction request.

The FTC contends that the acquisition would bestow upon Microsoft's video game console Xbox exclusive rights to Activision games, thereby excluding Nintendo consoles and Sony's PlayStation from the equation.

While Microsoft's bid to acquire the popular "Call of Duty" video game maker was approved by the European Union in May, British competition authorities blocked the takeover in April.

Microsoft maintains that the deal would benefit gamers and gaming companies alike and has offered to sign a legally binding consent decree with the FTC, ensuring the availability of "Call of Duty" games to competitors, including Sony, for a decade.

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