According to a court document, a US federal judge on Tuesday temporarily barred Microsoft from consummating its $69 billion acquisition of gaming titan Activision Blizzard.
In a decision, Judge Edward Davila stated that it “is necessary to maintain the status quo” while the court takes the Federal Trade Commission (FTC)’s request for a longer-term injunction on the transaction into consideration.
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According to the decision, a hearing was scheduled for June 22 and June 23 in San Francisco federal court to hear testimony in the case.
The decision was made a day after the FTC requested a federal judge to halt Microsoft’s mega-acquisition of Activision Blizzard while it considered taking regulatory action.
“A preliminary injunction is necessary to… prevent interim harm” while the FTC determines whether “the proposed acquisition violates US antitrust law,” the regulator said in the filing.
The court’s decision on Tuesday prevents Microsoft from moving forward with the acquisition until it determines whether to grant the regulators’ request for a preliminary injunction.
Microsoft made a bid for Activision Blizzard in an effort to overtake China’s Tencent and Sony
The US government asked for a preliminary injunction at the Northern California District Court in an effort to stop the corporations from concluding the agreement before a deadline of July 18.
A restraining order would prevent the agreement before the FTC hearing, which is scheduled for August and will debate the deal’s merits, is concluded. After hearing Microsoft’s and the FTC’s arguments for and against the takeover, the California judge would need to rule in favor of stopping the agreement.
“We welcome the opportunity to present our case in federal court,” Microsoft President Brad Smith said on Monday.
“We believe accelerating the legal process in the US will ultimately bring more choice and competition to the market,” he added.
Last year, Xbox-owner, Microsoft made a bid for Activision Blizzard in an effort to overtake China’s Tencent and Sony, the manufacturer of the PlayStation, as the third-largest revenue-generating gaming company in the world.
The merger was approved by the European Union, but the British Competition and Markets Authority (CMA) vetoed it in April on the grounds that it would hurt competition in the cloud gaming market.
The FTC filed a lawsuit in December to stop the deal with Activision Blizzard, the company behind the well-known “Call of Duty” game, because they believed it would impede competition.
President Joe Biden chose Lina Khan, an antitrust professor who has previously advocated for dismantling the largest internet companies, to lead the regulator in 2021. Khan has charged Facebook’s parent company, Meta, of suppressing competition by acquiring businesses, and the FTC has looked at Amazon.