(CTN NEWS) – A federal judge in California temporarily halted Microsoft Corp.’s $69 billion acquisition of Activision Blizzard Inc., stating that the status quo must be maintained while the Federal Trade Commission contests the transaction.
The FTC filed an emergency motion to stop the merger on Monday after attempting to prevent the agreement in its internal court.
According to US District Judge Edward J. Davila, the decision keeps the two firms apart for five days after the court determines on a longer lengthy suspension of the agreement.
On June 22 and 23, a hearing will be convened in San Francisco to provide evidence regarding the longer-term injunction.
U.S. FTC Sues To Stop The Deal With An Injunction
The FTC filed a lawsuit at its internal court last year, but the agency’s administrative judge is unable to halt the purchase.
The order, according to a Microsoft representative, was anticipated, and the court deserves praise for moving the matter through so quickly.
The FTC chose not to respond.
The agreement has been contested by parties other than the US government. The deal was rejected by UK competition regulators, however, Microsoft is contesting that decision.
List Of The Countries That Approved Microsoft-Activision Blizzard
Here’s a list of all the countries that have approved Microsoft’s acquisition of Activision Blizzard so far:
- South Africa
- Saudi Arabia
Microsoft and Activision Blizzard Legal Justifications
Microsoft and Activision Blizzard now have until June 16 to present legal justifications for rejecting a preliminary injunction, and the FTC, which upholds US competition law, must respond by June 20.
According to the FTC, the agreement would grant Xbox exclusive access to Activision Blizzard titles, leaving Nintendo gaming systems and Sony’s PlayStation out in the cold.
Microsoft has proposed to sign a legally binding agreement with the FTC to provide Call of Duty games to competitors like Sony for a decade and has claimed that the proposal will help gamers and gaming firms.
The action was taken after the EU ratified the deal despite the UK’s opposition due to worries that it would harm competition.
The proposed acquisition of Activision by Microsoft has divided international authorities, and for the transaction to close, the parties need the blessing of regulatory organisations in the US, the UK, and the EU.
According to the European Commission, there would be fair competition in the market as a result of Microsoft’s offer of 10-year free licencing licenses, which guarantee European players access to Activision’s PC and console games as well as cloud gaming services.
But the UK’s Competition and Markets Authority (CMA), which expressed concern that the takeover would result in less innovation and less choice for gamers, vetoed the deal in April.
The Future Of Video Games
Activision Blizzard and Microsoft criticized the CMA’s ruling and declared they would appeal.
According to Microsoft President Brad Smith, it was the “darkest day” in the company’s forty years of operations in Britain.
In reaction to the FTC’s announcement on Monday, Mr. Smith stated that Microsoft welcomed the “opportunity to present our case in federal court” in an effort to persuade US regulators to approve the deal.
He continued, “We think hastening the legal procedure in the US will ultimately increase choice and competition in the market.”
Microsoft is striving to catch up with its primary rival Sony, thus the acquisition of Activision, which also produces Candy Crush, is considered as essential.
The company gambled heavily on its Xbox Game Pass service, which has been dubbed the “Netflix of games,” so this attempted investment by Microsoft might be viewed as a move for the future of video games.
Microsoft thinks that rather than paying one-time purchases, which are currently the primary method of getting games, gamers should have subscriptions to libraries and should stream games via “cloud gaming” in the future.
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