Federal Judge Halts Microsoft’s Purchase of Activision

Late on Tuesday, a U.S. judge approved the Federal Trade Commission’s (FTC) request to temporarily halt Microsoft Corp’s purchase of Activision Blizzard, a video game manufacturer, and scheduled a hearing for next week.

U.S. District Judge Edward Davila scheduled a two-day evidentiary hearing on the FTC’s preliminary injunction request for 22-23. June to San Francisco. Without the court ruling, Microsoft could have closed the $69 billion deal as early as Friday.

The FTC, which oversees antitrust laws, asked an administrative judge to block the deal in early December. Evidence processing in the administrative procedure begins on August 2.

A federal court will decide at a hearing in late June whether a preliminary injunction — which would last during the administrative hearing of the case — is needed. The FTC filed for a temporary restraining order on Monday.

Davila said Tuesday’s temporary restraining order “is necessary to preserve the status quo pending the complaint (and) to preserve this court’s ability to order effective relief in the event it determines that a preliminary injunction is warranted and to preserve the FTC’s ability to obtain effective permanent relief in the event that it prevails in the pending administrative proceeding.”

Microsoft and Activision have until June 16 to file legal arguments challenging the preliminary injunction; The FTC has June 20 to respond.

Activision, which said Monday that the FTC’s decision to seek a federal court order was a “welcome update and expedites the legal process,” declined to comment Tuesday.

Microsoft said on Tuesday that “speeding up the legal process in the US will ultimately bring more choice and competition to the gaming market. A temporary restraining order makes sense until we get a ruling from the court, which will move quickly.”

The FTC declined to comment.

Davila said the injunction will remain in effect for at least five days after the court rules on the preliminary injunction request.

The FTC has argued that the deal would give Microsoft’s Xbox video game console exclusive access to Activision games, leaving Nintendo consoles and Sony Group Corporation’s PlayStation out in the cold.

Microsoft’s bid for the “Call of Duty” video game maker received EU approval in May, but British competition authorities blocked the takeover in April.

Microsoft has said the deal would benefit both gamers and game companies, and has offered to sign a legally binding consent decree with the FTC to offer Call of Duty games to competitors, including Sony, for a decade.

The case reflects the administration of US President Joe Biden’s muscular approach to antitrust enforcement.