What you need to know
- The long, exhausting battle for Microsoft to acquire Activision Blizzard treks into another saga today.
- The FTC is reportedly moving to file a formal injunction to block the deal.
- The FTC is attempting to stop the Microsoft and Activision Blizzard deal from going through ahead of its deadline.
- Microsoft is reportedly welcoming the move, as it will expedite the appeal process.
- Update: The FTC has officially filed for a temporary restraining order and a preliminary injunction ahead of the merger's July 18 deadline, with an evidentiary hearing scheduled for August 2.
Update June 12, 2023 at 3:30 p.m. PT / 6:30 p.m. ET: Activision Blizzard reached out to Windows Central with an official statement, in the form of an email released to employees from Activision Blizzard CEO Bobby Kotick. You can find the letter enclosed below, followed by our original article.
"I want to share a positive development in our merger progress.
In December, the U.S. Federal Trade Commission (FTC) launched an unsupportable effort to challenge the merger. Today it announced its intention to move the case to federal court.
This is a welcome update and one that accelerates the legal process. We will now have the opportunity to more quickly present the facts about our merger, which:
- Supports our hundreds of millions of players
- Helps protect American workers
- Provides increased shareholder value for the millions of people whose retirement savings and pension benefits will increase as a result of the acquisition
- Enables two American companies to more effectively compete against the global competitors that dominate the video game industry around the world
Our excellent legal team has been preparing for this move for more than a year, and we're ready to present our case to a federal judge who can evaluate the transaction on the merits.
The facts are on our side, and we will continue to keep you updated throughout the process.
As I’ve said before, we're in a strong position because of your dedication and hard work. I take deep pride in our continued success, and I hope you do as well. Thank you for your hard work and excellence."
Update June 12, 2023 at 2:30 p.m. PT / 5:30 p.m. ET: As confirmed by The Verge, the FTC has now officially filed for a temporary restraining order and a preliminary injunction weeks before the deal's July 18 deadline. Currently, there's an evidentiary hearing scheduled for August 2.
Additionally, Microsoft President Brad Smith has confirmed that the firm is eager to resolve this matter sooner rather than later in a statement to The Verge. "We welcome the opportunity to present our case in federal court,” Smith said. “We believe accelerating the legal process in the US will ultimately bring more choice and competition to the market.”
Our original story is below.
Microsoft has been working to acquire games publisher Activision Blizzard for well over a year now, and has been faced with a mountain of regulatory hurdles and obstacles. Today, the glacial slog to push the deal through is hitting another wall — or milestone, depending on your perspective.
According to a report by CNBC, the United State's Federal Trade Commission (FTC) is moving to formally file an injunction request to block the Microsoft and Activision Blizzard deal as soon as today. This is a step beyond the FTC previously suing Microsoft, as an injunction comes with a temporary block to prevent the deal from going through and will see the matter brought before a federal judge more quickly.
According to the report, Microsoft is actually welcoming the injunction, as it does expedite the process. Rather than trekking through FTC's internal legal process before being able to make an appeal, an injunction will allow Microsoft to fight for the Activision Blizzard deal in federal court sooner.
The USA's FTC is one of two major obstacles still preventing Microsoft from acquiring Activision Blizzard. The other is the UK's Competition and Market Authority (CMA), which voted to block the deal. Microsoft is moving forward with appealing the decision with the UK's Competition Appeal Tribunal (CAT). Microsoft's efforts to succeed in the UK (and reports that Microsoft may consider pulling Activision Blizzard out of the UK in order to push the deal through) may be responsible for the FTC's decision to, at least temporarily, formally block the acquisition.
Most other major regulatory bodies, including the EU, have approved the Microsoft and ABK deal. So, what does this mean? Nothing right now. The Microsoft and Activision Blizzard deal is still trapped in a never-ending in-between state of life and death. Microsoft may succeed in appealing to the CAT and overturning the CMA's decision in the UK, but now it also has to repeat the same with the FTC in the USA.
Should the deal go through, Microsoft will be able to bring all of Activision Blizzard under the Xbox umbrella, including just-released hits like Diablo 4, which counts as one of the best Xbox games of the year. This would also likely mean a huge boon for both Xbox Game Pass and Xbox Cloud Gaming.
