FTC Takes Legal Action Against Microsoft to Cease Activision Blizzard Acquisition

Microsoft Faces Suit to Block $69 Billion Acquisition of Activision Blizzard

The Federal Trade Commission (FTC) has filed a lawsuit against Microsoft in federal court, seeking to prevent the company from finalizing its $69 billion acquisition of Activision Blizzard. The suit was filed in California federal court, requesting a court order to block the transaction from being completed before the deal’s July 18 deadline.

Antitrust Scrutiny on Both Sides of the Atlantic

Antitrust scrutiny has been tight on both sides of the Atlantic for the acquisition. While Microsoft won approval from the European Union, the UK’s Competition and Markets Authority ruled against the takeover in April. According to the CMA, Activision titles like Call of Duty would give Microsoft an unfair edge over its rivals in the small but growing cloud-gaming market.

Microsoft appealed the CMA’s decision, which is globally binding. Microsoft President Brad Smith met with UK Chancellor Jeremy Hunt this month to discuss the deal. Smith expressed disappointment with the decision when the CMA vetoed the deal in April. He felt that the ruling had shaken “people’s confidence in technology in the UK.”

FTC Aims to Block the Deal

The FTC first sued in December in its in-house court, arguing that Microsoft’s acquisition of Activision Blizzard would harm competition in the US video game market. However, this complaint didn’t prevent Microsoft from closing the deal, and the FTC has thus sought the help of a federal judge to block the transaction.

Microsoft’s Response

Microsoft President Brad Smith has responded to FTC’s move, saying, “we welcome the opportunity to present our case in federal court. We believe accelerating the legal process in the US will ultimately bring more choice and competition to the market.”

Microsoft and Activision Blizzard’s Stocks

Microsoft’s shares rose 1.6% to close at $331.85, while Activision Blizzard saw its shares drop by 0.8% to close at $79.77.

The Future of the Deal

It remains to be seen how the lawsuit will affect the deal in the coming days. Regardless of the outcome, it is clear that Microsoft and Activision Blizzard will undertake whatever steps necessary to secure the deal.