A judge has accepted US regulators’ plea to temporarily halt Microsoft’s $69 billion (£56 billion) merger of Activision Blizzard.
According to the court, the temporary restraining order is “required to maintain the status quo while the complaint is pending.”
According to the US Federal Trade Commission (FTC), the merger could “substantially lessen competition” in the sector.
A two-day hearing is now scheduled to begin on June 22 in San Francisco :
The transaction to acquire Activision Blizzard, the parent firm of popular video game franchises such as Call of Duty and Candy Crush, would be the most significant in the annals of the video game business.
It has caused friction among competition regulators in the United Kingdom, the United States, and Europe. The European Union gave its blessing to the buyout, but the United Kingdom refused to participate.
Microsoft and Activision need to receive clearance from the relevant authorities in the United Kingdom, the European Union, and the United States before they can proceed with the merger.
The Federal Trade Commission has expressed concern that the proposed transaction would deprive competitors Nintendo and Sony of access to Activision’s catalogue of video games, favoring Microsoft’s Xbox console.
The deadline for Microsoft and Activision to submit their legal arguments to oppose the preliminary injunction has been extended to June 16th, and the FTC is required to respond on June 20th.
Microsoft has stated that the gaming industry as a whole and individual players would profit from the acquisition of Activision.
It has proposed to enter a legally enforceable deal with the FTC to supply competing companies, such as Sony, with Call of Duty games for a period of ten years.
The European Commission has given its blessing to the acquisition on the grounds that there will be enough levels of competition in the market as a result of Microsoft’s offer of 10-year free licensing terms. These deals guarantee that European customers and cloud game streaming services will have access to Activision’s personal computer and console games.
The Competition and Markets Authority (CMA) in the United Kingdom put a stop to the acquisition in April, citing concerns that the buyout would result in fewer opportunities for innovation and fewer options for gamers.
Both Microsoft and Activision have expressed their displeasure with the CMA’s ruling and stated that they intend to challenge it.
Microsoft President Brad Smith described the event as the “darkest day” in the history of the company’s operations in Britain, which spans four decades.
Mr. Smith Statement:
In reaction to the news that was released by the FTC on Monday, Microsoft’s representative, Mr. Smith, stated that the company welcomed the “opportunity to present our case in federal court” in its effort to convince US regulators to allow the transaction to be finalized.
In addition, he stated that “we believe that accelerating the legal process in the United States will ultimately bring more choice and competition to the market.”
Microsoft, which is attempting to catch up to its primary rival Sony, is considered as having a significant interest in acquiring Activision, which is also responsible for the production of Candy Crush.
However, this potential investment from Microsoft might be considered as a move for the future of video games, with the company investing big on its Xbox Game Pass service, which has been described as the “Netflix of games.” Microsoft is banking big on its Xbox Game Pass service, which has been described as the “Netflix of games.”
Microsoft is of the opinion that the primary method of gaining access to video games in the not too distant future will be through “cloud gaming” and subscriptions to game libraries, rather than through the purchase of individual video games, which is the prevalent practice at the moment.