The Federal Trade Commission has taken legal action to prevent Microsoft from completing its $75 billion acquisition of Activision Blizzard.
In a move to block the deal, the FTC has requested an injunction from a federal court in San Francisco.
Recent media reports suggested that Microsoft was considering moving forward with the acquisition despite legal opposition in the US and UK.
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The FTC’s request for an injunction would require a judge’s approval following a hearing where evidence will be presented to support the claim that the deal is illegal.
Microsoft Vice Chair and President Brad Smith responded to the FTC’s plans, saying the company welcomes the opportunity to present its case in federal court.
Smith believes expediting the legal process will ultimately introduce more choice and competition to the market.
Microsoft announced the acquisition plan in January 2022 with a deal valuation of $69 billion after adjusting for Activision’s net cash.
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The original plan was to close the transaction in the coming month.
But FTC blocked it in December, arguing Microsoft would be granted the power to control access to Activision’s games beyond its own Xbox consoles and subscription services.
The agency expressed concerns Microsoft could raise prices for non-hardware users or even restrict access altogether.
The FTC’s initial lawsuit was filed within its in-house court, and at that time, an emergency order to halt the deal was not sought due to the closing date being several months away.
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An in-house court trial is scheduled for early August, but a decision from the administrative law judge may take additional time.
The court case and the FTC’s request for an injunction will proceed simultaneously.
The FTC stressed the necessity of an injunction, stating allowing the acquisition to proceed before the August hearing would allow Microsoft to make significant changes to Activision’s operations.
It says the tech giant can access sensitive information, eliminate key personnel, alter game development efforts, and establish new contractual relationships on behalf of Activision.
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The agency argued that such actions would harm competition during the interim period.
If a judge denies the injunction, it will challenge the FTC’s claim that the Microsoft-Activision deal is unlawful.
If an injunction is denied, the FTC tends to drop its opposition to the deal.
A similar scenario occurred with Meta’s acquisition of Within Unlimited, where the FTC abandoned its in-house court proceeding after a judge ruled against the agency’s request for an injunction.
Microsoft also faces obstacles in closing the deal in the UK, as the Competition and Markets Authority (CMA) rejected the proposed merger in April.
