Microsoft’s $69 billion takeover of American gaming giant Activision-Blizzard was temporarily blocked by a federal judge in California saying that it “is necessary to maintain the status quo”.
The ruling prevents both companies from moving forward with the deal as the court decides whether to issue a preliminary injunction sought by regulators.
The case will be next on June 22 and June 23 in San Francisco federal court to hear evidence in the matter, the ruling stated.
Microsoft and Activision have to submit legal arguments by June 16 to oppose a preliminary injunction, whereas the FTC will have to reply on June 20.
In requesting the preliminary injunction at the Northern California District Court, the US government sought to prevent the companies from finalizing the deal before a July 18 deadline.
Microsoft’s deal hits regulatory roadblock | World Business News
An FTC hearing is set for August to argue the merits of the deal, and a restraining order would block the accord before that process has run its course.
The California judge would need to agree to stop the deal after hearing arguments by the FTC on why the buyout is illegal and from Microsoft on why it should go ahead.
FTC’s gripe with the deal
It comes a day after the FTC sought to block the deal in its in-house court and filed an emergency motion to halt the merger on Monday, arguing that the deal could “substantially lessen competition” in the sector.
“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 US regulator has argued that the deal allows Microsoft’s Xbox console to have exclusive access to Activision games, which can threaten Nintendo consoles and Sony’s PlayStation.
Microsoft has said the deal would be a win-win situation for gamers and gaming companies, and even offered to sign a legally binding agreement with the FTC to provide Call of Duty games to rivals for a decade.
The Microsoft-Activision deal has split the global regulators, and in order for the deal to go through the parties need approval from regulatory bodies in the UK, the EU and the US.
(With inputs from agencies)
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