The US Federal Trade Commission has asked a federal court to block Microsoft from closing its $75 billion acquisition of Activision Blizzard, putting pressure on the gaming industry’s biggest deal.
The antitrust watchdog last year sued to block the transaction through its own in-house court proceedings, which are set to take place in August. But on Monday it filed a separate request in a federal court in California to prevent Microsoft from closing the deal before a decision is made. It is more difficult to challenge a deal after it is done.
The FTC has asked the court to rule on the request for a temporary restraining order by Thursday.
“The proposed acquisition would continue Microsoft’s pattern of taking control of valuable gaming content,” the FTC said in the filing. “With control of Activision’s content, Microsoft will have an increased ability and incentive to withhold or degrade Activision’s content in a manner that would substantially lessen competition, including competition over product quality, price and innovation.”
Bobby Kotick, chief executive of Activision, which makes the blockbuster game series Call of Duty, said in an email to employees on Monday: “This is a welcome update and it speeds up the legal process. We will now have the opportunity to present the facts about our merger more quickly.”
Before the court filing, Brad Smith, vice-chair and president of Microsoft, said: “We welcome the opportunity to present our case in federal court. We believe that accelerating the legal process in the US will ultimately bring more choice and competition to the market.”
The regulator’s move against the Microsoft deal is seen as one of the most high-profile challenges brought by Joe Biden’s administration. The president appointed a group of progressive antitrust officials eager to crack down on what he sees as anticompetitive behavior in the U.S. economy, including Lina Khan, the FTC chair.
The UK’s Competition and Markets Authority decided to block the deal in April, putting the acquisition in serious jeopardy. The CMA argued that Microsoft could make Activision’s games exclusive to its own cloud gaming service.
In a break from the UK and US, the EU approved the acquisition last month, saying Microsoft had settled its concerns.
The FTC said Monday that the agency filed the new complaint because of reports that the businesses were considering closing the deal “immediately.”
In an interview with the Financial Times in February, Kotick complained that “ideologues” who believed “big is bad” were taking over competition authorities.
Activision was surprised by the FTC’s decision to sue to block the deal in December, he said, because “nobody expected the ideology to get in the way of the opportunity.”
The FTC’s treatment of the deal intensified corporate America’s concerns that Khan was pursuing a more interventionist antitrust policy. The US Chamber of Commerce Chief Executive Suzanne Clark earlier this year cited the agency as an example of “unprecedented regulatory over-reach,” which she vowed the business lobby would fight in court.
