U.S. regulators have blocked Microsoft’s acquisition of Activision Blizzard, using a restraining order to temporarily halt the deal.
The US Federal Trade Commission (FTC) has been granted a Temporary Restraining Order (TRO) against the proposed deal until the courts decide whether or not to grant the FTC a preliminary injunction.
“Until recently, Defendants indicated that they would not complete the proposed acquisition unless and until they received clearance from European regulators, including in proceedings before this Court in a private case challenging the proposed acquisition,” stated the FTC’s filing.
However, the FTC is now concerned that Microsoft and Activision Blizzard intend to close the deal despite the UK’s Competitions and Markets Authority effectively blocking the deal in this region.
“Press reports began circulating suggesting that Defendants were seriously contemplating closed the proposed acquisition despite the pending administrative litigation and the CMA orders,” said the FTC.
The FTC’s Order was filed on 12 June, which requested both a TRO and preliminary injunction. However, Activision Blizzard CEO Bobby Kotick reportedly approved of the FTC’s move.
“This is a welcome update and one that accelerates the legal process,” he said in a blog post. “We will now have the opportunity to more quickly present the facts about our merger… Our excellent legal team has been preparing for this move for more than a year, and we’re ready to present our case to a federal judge who can evaluate the transaction on the merits.”
The Temporary Restraining Order means that everything has to be left as-is until the courts decide whether or not to press ahead with a preliminary injunction. Essentially, the Microsoft Activision deal cannot be closed “until after 11:59 pm PT on the fifth business day after the court rules on the FTC’s request for a preliminary injunction.”
If a preliminary injunction is granted, everything will be put on hold until the FTC’s full complaint is brought before the courts.
Microsoft and Activision have been ordered to submit their opposition to the preliminary injunction by June 16, then the FTC has until June 20 to submit its reply. An evidentiary hearing has been set for June 22 and 23.
Previously, the merger was approved by the EU just last month, while Microsoft president Brad Smith claimed that the UK’s opposition to the deal would be “bad for Britain”.
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