The U.S. Federal Trade Commission (FTC) on Monday applied for a temporary restraining order and preliminary injunction seeking to block Microsoft’s acquisition of Activision Blizzard before the deal’s July 18 deadline, CNBC reported.
According to CNBC, the FTC said it fears that should Microsoft be allowed to buy Activision, Microsoft would have the power to “withhold or degrade” Activision’s gaming products, through price, game quality, experience on competitors’ offerings, or “withholding content from competitors entirely.”
In other words, the FTC is worried that Microsoft could withhold popular games from Activision Blizzard’s library from launching on other game consoles, like those sold by Sony. Or it could charge more for the games that launch on other consoles.
Call of Duty is one title that has come up and, while it’s currently available across platforms and Microsoft has promised to continue to sell that series of games broadly, regulators fear that Microsoft could have the power to hold those or similarly popular future titles for Xbox, taking buyer away from Sony and other console makers, CNBC reported.
The Verge reported that the Federal Trade Commission filed a complaint on Monday seeking to get the restraining order and a preliminary injunction. If the courts grant the injunction as well, the FTC would have a chance to make its legal case before any deal can be done.
As a result of today’s order, Microsoft and Activision cannot complete the acquisition 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” or a date se by the court (whichever is later), The Verge reported.
The court has also set an evidentiary hearing on the preliminary injunction for June 22nd and 23rd, so its extremely unlikely these companies will close the transaction this month.
The Verge posted the preliminary injunction on its website.
The Wall Street Journal posted a quote. “We welcome the opportunity to present our case in federal court,” said Microsoft Vice Chair and President Brad Smith in a statement following earlier reports of the FTC’s plans. “We believe accelerating the legal process in the U.S. will ultimately bring more choice and competition to the market.”
According to The Wall Street Journal, if a judge denies the injunction, it would be a blow to the FTC’s assertion that the Microsoft-Activision deal is illegal. The commission could continue its separate, in-house lawsuit, but the FTC more often drops its opposition to a deal if a judge denies an injunction.
Personally, I think it’s best to just wait and see what the court decides. We will hear the outcome eventually. I feel like this whole issue keeps going around and around with the FTC and also the UK’s CMA. Something has to give.