A US federal judge on Tuesday temporarily blocked Microsoft
from completing its $69 billion buyout of gaming giant Activision Blizzard, a
court filing showed.
Judge Edward Davila said in a ruling that it “is necessary
to maintain the status quo” while the court considers a longer term injunction
on the purchase as requested by regulators at the Federal Trade Commission
(FTC).
A hearing was set for June 22 and June 23 in San Francisco
federal court to hear evidence in the matter, according to the ruling.
The ruling came a day after the FTC asked a federal court
prevent Microsoft from completing its blockbuster buy of Activision Blizzard as
it considers regulatory action.
“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.
Tuesday’s ruling bars Microsoft from moving forward with the
deal before the court decides whether to issue a preliminary injunction sought
by regulators.
In requesting the preliminary injunction at the Northern
California District Court, the US government sought to prevent the companies
from finalizing the deal before a July 18 deadline.
An FTC hearing is set for August to argue the merits of the
deal, and a restraining order would block 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 on Monday.
“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 and Japan’s PlayStation maker Sony.
While the European Union has greenlit the deal, Britain’s
Competition and Markets Authority (CMA) blocked it in April, arguing it would
harm competition in cloud gaming.
The FTC in December sued to block the transaction with
Activision Blizzard, maker of the popular “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 President Joe Biden to the job in 2021.
Khan has accused Meta, Facebook’s parent company, of
stifling competition by buying up startups and the FTC has carried out
investigations of Amazon.
The US Department of Justice, meanwhile, has filed lawsuits
arguing that Google has committed antitrust violations in online search as well
as in advertising.
