The U.S. Federal Trade Commission is escalating its efforts to stop Microsoft from buying Activision Blizzard and will file an injunction to block the purchase, according to multiple reports.
This action is an effort to stop the acquisition before its July 18 deadline. The FTC previously sued to block Microsoft’s purchase of Activision Blizzard, with this impending injunction serving to expedite proceedings.
“We welcome the opportunity to present our case in federal court,” said Microsoft president Brad Smith. “We believe accelerating the legal process in the U.S. will ultimately bring more choice and competition to the market.”
In a blog post entitled “We’re ready to make our case for the Microsoft deal in federal court,” Activision Blizzard shared an email that CEO Bobby Kotick sent to employees discussing the FTC’s move.
“In December, the U.S. Federal Trade Commission (FTC) launched an unsupportable effort to challenge the merger,” Kotick wrote. “Today it announced its intention to move the case to federal court.” Kotick ended the note by saying the company’s legal team has been prepping for this turn of events for over a year and that “the facts” are on Activision Blizzard’s side.
“Microsoft and Activision Blizzard have represented in the past that they cannot close their deal due to antitrust reviews of the transaction in other jurisdictions,” said an FTC spokeswoman. “But Microsoft and Activision [Blizzard] have not provided assurances that they will maintain that position. In light of that, and public reporting that Microsoft and Activision Blizzard are considering closing their deal imminently, we have filed a request for a temporary restraining order to prevent them from closing while review continues.”
The U.S. Federal Trade Commission isn’t the only trade regulator attempting to halt Microsoft’s effort to acquire the owner of legendary franchises such as “Call of Duty” and “Diablo.” The U.K.’s Competition and Markets Authority also stands in the way of the deal, having bloncked it. Microsoft is appealing the decision, not content with the CMA’s argument that the deal would give Redmond a stranglehold on the rapidly evolving cloud gaming space.
If you’re wondering why Microsoft is pushing so hard to see the deal go through, know that Activision Blizzard controls a broad portfolio of IP covering not only console games but also popular PC franchises and mobile blockbusters (“Candy Crush” is one big example).
To put into context how strong Activision Blizzard’s franchises are, look no further than “Call of Duty: Modern Warfare 2,” a game that came out in October to mixed PC reviews yet has dominated PC sales charts for 46 weeks straight. That same game hit $1 billion in sales within its first 10 days on the market (across all platforms).