The US Federal Trade Commission (FTC) on Monday asked a federal court to block Microsoft Corp from completing its US$69 billion buyout of gaming giant Activision Blizzard Inc, a court filing showed.
“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.
In requesting the preliminary injunction at the US District Court for the Northern District of California, the US government sought to prevent the companies from finalizing the deal before a July 18 deadline.
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An FTC hearing is set for August to argue the merits of the deal, but the appeal to a federal court would potentially see Microsoft subject to a restraining order blocking 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.
“We welcome the opportunity to present our case in federal court,” Microsoft president Brad Smith said.
“We believe accelerating 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, seeking to establish the world’s third-biggest gaming firm by revenue after China’s Tencent Holdings Ltd (騰訊) and Japan’s PlayStation maker Sony Group Corp.
While the EU has greenlit the deal, The UK’s Competition and Markets Authority blocked it in April, saying it would harm competition in cloud gaming.
The FTC in December last year sued to block the transaction with Activision Blizzard, maker of the blockbuster Call of Duty title, over concerns that it would stifle competition.
The regulator is led by Lina Khan, an antitrust academic who had been an advocate of breaking up the biggest tech firms before she was nominated by US President Joe Biden to the job in 2021.
Khan has accused Meta Platforms Inc, Facebook’s parent company, of stifling competition by buying up start-ups and the FTC has carried out investigations of Amazon.com Inc.
Meanwhile, the US Department of Justice has filed lawsuits arguing that Google has committed antitrust contraventions in online search as well as in advertising.
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