FTC files to block Microsoft from buying Activision Blizzard

The Federal Trade Commission is asking US courts to block Microsoft from acquiring Activision Blizzard while a larger government case to block the merger is underway. The FTC originally filed a legal challenge in December to try and stop Microsoft’s proposed Activision Blizzard acquisition, and it’s now seeking a temporary restraining order and an injunction from a US federal district court.

“Both a temporary restraining order and a preliminary injunction are necessary because Microsoft and Activision have represented that they may terminate the Proposed Acquisition at any time,” reads FTC complaint,

The FTC filed its complaint just as Microsoft is moving forward with its appeal against UK regulators’ decision to block its proposed acquisition. The timing, with just weeks to go before the July 18 deal deadline, shows the FTC is concerned Microsoft is preparing to close its acquisition regardless of the block in the UK. European regulators greenlighted the deal last month, so Microsoft could technically block the deal from closing without a UK and US injunction.

The FTC’s complaint says, “Press reports began to suggest that Defendants were seriously considering closing the proposed acquisition, despite pending administrative litigation and orders from the CMA.” This, combined with an ongoing CMA appeal, could force the FTC to attempt to secure an injunction.

A US judge will now be required to issue a temporary restraining order (TRO) preventing Microsoft from closing the deal for two weeks and a preliminary injunction that would prevent Microsoft from closing pending the outcome of the FTC’s legal challenge. Could a proof hearing is scheduled For August 2, shortly after Microsoft’s appeal hearing begins in the UK.

If the FTC’s injunction fails, Microsoft is eager to fast-track the FTC case. “We welcome the opportunity to present our case in federal court,” said Brad Smith, Microsoft’s vice president and chairman, in a statement. ledge, “We believe that expediting the legal process in the US will ultimately lead to more choice and competition in the marketplace.” in email to employees shared publiclyActivision Blizzard CEO Bobby Kotick made a similar argument, saying Monday’s actions were “a positive development in the progress of our merger” because it “accelerates the legal process.”

Update June 12, 6:02 PM ET: Added statement from Activision Blizzard CEO Bobby Kotick.