A US regulator succeeded in temporarily blocking Microsoft’s £55bn takeover of video game maker Activision Blizzard, blocking a deal that closed this week.
The Federal Trade Commission (FTC) opposed the merger on competition grounds, and last night the court sought a preliminary injunction.
A two-day hearing has been scheduled for next week in San Francisco, where the parties will present their cases on injunction grounds alone.
The ruling is the latest milestone on the companies’ difficult regulatory road.
Their acquisition plan will give Microsoft control over important gaming content such as Call of Duty, Overwatch, and World of Warcraft.
the deal is Blocked by UK regulators.
CMA explains opposition to deal
Affiliated company plan appeal The Competition and Markets Authority (CMA) determined that this would stifle competition in the cloud gaming market.
The EU allowed the deal, but the FTC shared similar concerns with British regulators and moved to secure a ban, as the two sides could close the deal as early as Friday.
Completing the deal does not prevent it from being unwound at a later date if UK and US regulators win.
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U.S. District Judge Edward Davila said the temporary restraining order granted to the FTC “is necessary to maintain the status quo while the complaint is pending, (and) preserve the Court’s ability to order effective relief in cases where it determines that a preliminary injunction is warranted and Preserves the FTC’s ability to obtain effective permanent remedies in the event of success in pending administrative proceedings.”
Microsoft said it welcomes the FTC’s temporary injunction because it will speed up the legal process.
It argued the deal would benefit both gamers and gaming companies, and offered to enter into a legally binding consent decree with the FTC to make Call of Duty available to rivals including Sony and Nintendo within a decade .