US FTC files suit to halt Microsoft's Activision Blizzard deal: Report

The US Federal Trade Commission (FTC) has 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, the media reported.

Microsoft entered into a $68.7 billion deal to buy Activision in January 2022. Image Courtesy: Reuters.

The US Federal Trade Commission (FTC) has 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, the media reported.

The FTC expressed concern that if Microsoft is allowed to acquire Activision, Microsoft will be able to "withhold or degrade" Activision's gaming products through price, game quality, experience on competitors' offerings, or "withholding content from competitors entirely", reports CNBC.

Essentially, the FTC is concerned that Microsoft could block popular games from Activision Blizzard's library from being released on other consoles, like Sony, or charge more for games that are released on those consoles.

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The FTC argued that allowing the parties to merge before the case went through an administrative proceeding would make "reestablishing the status quo difficult, if not impossible", the report said. The request for an injunction comes as the deal's deadline approaches

Meanwhile, the European Commission has approved, under the EU Merger Regulation, the proposed acquisition of gaming giant Activision Blizzard by Microsoft for $68.7 billion.

The Commission said in a statement that it has based its decision on hard evidence, and on extensive information and feedback from competitors and customers, including from game developers and distributors as well as cloud game streaming platforms in the EU. Microsoft entered into a $68.7 billion deal to buy Activision in January 2022.

The FTC filed a lawsuit to stop the acquisition in December 2022, choosing to have the case heard by an internal administrative law judge. The FTC's case will be heard on August 2, according to the agency's filing.

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