Xbox owner Microsoft made an offer for Activision Blizzard early last year.
San Francisco, United States:
A U.S. federal judge on Tuesday temporarily prevented Microsoft from completing its $69 billion acquisition of gaming giant Activision Blizzard, a lawsuit found.
Judge Edward Davila said in a ruling that it is “necessary to maintain the status quo” as the court considers a longer-term purchase ban, as requested by Federal Trade Commission (FTC) regulators.
According to the ruling, a hearing was scheduled for June 22 and 23 in San Francisco federal court to hear evidence in the case.
The ruling came a day after the FTC asked a federal court to prevent Microsoft from completing its blockbuster purchase of Activision Blizzard as it considers regulatory action.
“Injunctive relief is necessary to prevent…preliminary damages,” while the FTC determines whether “the proposed acquisition violates U.S. antitrust law,” the regulator said in the filing.
Tuesday’s ruling bars Microsoft from moving forward with the deal before the court decides whether to issue a preliminary injunction requested by regulators.
By filing for the preliminary injunction in Northern California District Court, the US government sought to prevent the companies from finalizing the deal before July 18.
An FTC hearing is scheduled for August to argue the merits of the deal, and a restraining order would block the accord before that process is complete.
The California judge would have to agree to stop the deal after hearing arguments from the FTC about why the buyout is illegal and from Microsoft about why it should go ahead.
“We welcome the opportunity to take our case to federal court,” Microsoft president Brad Smith said Monday.
“We believe that speeding up the legal process in the US will ultimately bring more choice and competition to the market,” he added.
Xbox owner Microsoft launched a bid for Activision Blizzard early last year, in a bid to create the world’s third-largest gaming company after China’s Tencent and Japanese PlayStation maker Sony.
Although the European Union has given the green light to the deal, Britain’s Competition and Markets Authority (CMA) blocked it in April, arguing it would hurt competition in cloud gaming.
The FTC in December sued to block the transaction with Activision Blizzard, the maker of the popular “Call of Duty” title, over concerns it would strangle competition.
The regulator is led by Lina Khan, an antitrust academic who advocated breaking up the largest tech companies before being nominated for the job by President Joe Biden in 2021.
Khan has accused Meta, Facebook’s parent company, of stifling competition by buying up startups, and the FTC has investigated Amazon.
The US Department of Justice, meanwhile, has filed lawsuits alleging that Google has violated antitrust rules in both online search and advertising.
(Except for the headline, this story has not been edited by NDTV staff and is being published from a syndicated feed.)