The U.S. Federal Trade Commission filed a complaint in court Monday to block Microsoft’s acquisition of video game developer Activision Blizzard.
The FTC seeks a temporary restraining order and preliminary injunction, citing section 13(b) of the FTC Act. This would prevent Microsoft from closing its Activision Blizzard deal before its current termination deadline on July 18.
Microsoft moved to acquire Activision Blizzard, the third-party video game developer behind Call of Duty, Diablo, and Candy Crush, in January 2022 for $68.7 billion. If successful, it would be the largest acquisition in Microsoft’s history, overtaking its 2017 purchase of LinkedIn, and would propel Microsoft to become the second largest video game company in the world.
Microsoft has defended the acquisition on the basis that, due to its ongoing efforts in cloud-based and streaming services for video games, it would enable Activision Blizzard to expand its audience to over 150 million more players via methods such as Xbox Cloud Gaming.
“We welcome the opportunity to present our case in federal court,” said Brad Smith, vice chair and president of Microsoft, in a statement to GeekWire. “We believe accelerating the legal progress in the U.S. will ultimately bring more choice and competition to the market.”
Previously, on April 26, regulators at the UK’s Competition and Markets Authority issued a final decision to block Microsoft’s deal, citing the risk that the acquisition would place Microsoft in an early, dominant position in the still-developing cloud gaming market. A hearing for Microsoft’s appeal of that decision is scheduled for July 24.
The FTC had previously filed suit in December to stop the acquisition, citing the risk that Microsoft would use Activision’s content in order to suppress its competitors such as Sony. Microsoft has subsequently made numerous concessions toward that end, such as a 10-year guarantee that Activision’s Call of Duty games will continue to be available on Sony’s PlayStation.
Subsequently, reports appeared in the international press that Microsoft was in search of ways to close the deal regardless, which could potentially include the decision, occasionally nicknamed “Mexit,” to simply not offer Activision Blizzard products in the UK.
Those reports are cited in the FTC’s complaint as a motivator, alongside a separate emergency motion that would request a court order to block the official consummation of the Activision Blizzard acquisition. That order would only last until after the court has the chance to rule on the June 12 complaint.
The injunction is, in short, an attempt to stop Microsoft from doing any crazy end runs around its current legislative blockades in the U.S. and UK, such as withdrawing Activision’s software library from the market in either territory.
