A federal court has temporarily restricted Microsoft‘s $68.7 billion Activision Blizzard acquisition. The restraining order was issued after the FTC filed a preliminary injunction request against the Activision deal on Monday. This marks the latest development in the slew of events that have encompassed the pending purchase during the past few months. In any case, the court order could potentially dampen Microsoft’s efforts in seeing the deal through before the agreed deadline.


Since its announcement back in January 2022, Microsoft has come under a lot of scrutiny with both regulators and rival companies raising concerns over the acquisition. By December, the FTC moved to sue Microsoft’s Activision purchase, although this wouldn’t have necessarily blocked the deal itself. Later, on the heels of the UK regulator CMA’s decision to block the Activision deal, the FTC proceeded to file a preliminary injunction request. Now it appears that the federal court has moved in favor of the FTC’s request.

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As per the order, Microsoft and Activision won’t be able to complete the deal until “after 11:59 p.m. Pacific Time on the fifth business day after the Court rules on the FTC’s request for a preliminary injunction.” Alternatively, it would be a date set by the court should that fall later. The court has also set June 22 and 23 for an evidentiary hearing on the preliminary injunction. So it’s unlikely that Microsoft and Activision will close things off by this month, though the deadline for the transaction’s completion is July 18. Incidentally, if Microsoft fails to renegotiate an extended deadline the company will be liable to Activision Blizzard for a $3 billion breakup fee.

FTC vs Microsoft Activision Blizzard King logos on white background

It’s worth noting that in a situation where the court also grants the injunction, the FTC could proceed to build its legal case before the deal goes through. With the news of the FTC’s decision to file for the injunction, Microsoft openly offered an optimistic response. The company’s President Brad Smith stated that the decision-making process would now be accelerated and that it “benefits everyone.” Previously, it was indicated that Microsoft may proceed to complete the Activision transaction even without the FTC’s approval. As of now, it remains to be seen how things will fall in line over the next few weeks as Microsoft keeps pushing to make its case.

Apart from the FTC, the Xbox maker is also looking to gain ground in the UK following the CMA’s decision to block the deal. As part of its appeal case filing, Microsoft’s first appellate hearing is now scheduled for July 24. It will be interesting to see how its appeal pans out, particularly considering the EU’s move to approve the Activision acquisition. Additionally, numerous regulatory bodies from around the world ranging from Brazil to South Korea have already greenlit the deal. Either way, it appears that Microsoft‘s ambitions for Activision Blizzard may need to be put off for a little while longer.

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Source: The Verge

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