The FTC asked a judge to temporarily block Microsoft Corp.’s (MSFT.O) acquisition of Activision Blizzard (ATVI.O) until the government’s case against the $69 billion merger.
Since Microsoft and Activision indicated the merger could conclude Friday, the FTC asked a federal judge to halt any formal agreement before 11:59 p.m. ET on June 15.
The FTC said the deal will give Microsoft the “ability and increased incentive to withhold or degrade Activision’s content in ways that substantially lessen competition.”
The FTC said that without a judge, the combined entity “could alter Activision’s operations and business plans” and allow the software giant to access critical corporate information.
The FTC, which oversees antitrust law, sought an in-house administrative judge to prohibit the acquisition in early December because it would offer Microsoft’s Xbox exclusive access to Activision games, leaving Nintendo (7974.T) and Sony Group Corp.’s (6758.T) PlayStation out in the cold.
British competition authorities blocked Microsoft’s $69 billion acquisition of “Call of Duty” videogame manufacturer in April. In May, the EU approved it. Microsoft surged 1.5% Monday, while Activision fell 0.8%.
“We welcome the opportunity to present our case in federal court,” Microsoft president Brad Smith said. Activision was silent.
Microsoft proposed a legally enforceable consent agreement with the FTC to provide “Call of Duty” games to Sony for a decade. Microsoft announced the purchase in January 2022, anticipating finishing in their June 2023 fiscal year.
“In light of that, and public reporting that Microsoft and Activision Blizzard are considering closing their deal imminently,” an FTC spokeswoman said.
The case highlights President Joe Biden’s aggressive antitrust enforcement.
Due to Microsoft’s voluntary concessions to calm concerns it could control the gaming market, antitrust experts think the FTC may struggle to invalidate the deal. August 2 is the FTC’s administrative court trial date.
