FTC Files to Block Microsoft From Closing Activision Deal (3)

The Federal Trade Commission sued Microsoft Corp. in federal court Monday to block the company from closing its $69 billion acquisition of Activision Blizzard Inc.

In a filing in California federal court, the FTC sought a court order blocking the transaction from going through before the deal’s July 18 deadline, asking for the agency’s in-house court to have a chance to review.

WATCH: Microsoft Corp.’s video gaming chief Phil Spencer talks about trying to close the Activision deal.

Source: Bloomberg

Microsoft shares closed 1.6% higher at $331.85 while Activision Blizzard ended 0.8% lower at $79.77.

“We welcome the opportunity to present our case in federal court,” Microsoft President Brad Smith said in a statement. “We believe accelerating the legal process in the U.S. will ultimately bring more choice and competition to the market.”

The $69 billion deal has faced tough antitrust scrutiny on both sides of the Atlantic. Microsoft, which makes the Xbox console, won approval in the European Union, but the UK’s Competition and Markets Authority in April ruled against the takeover, saying Activision titles like Call of Duty would bolster Microsoft’s edge over rivals in the small but growing cloud-gaming market.

Microsoft is appealing the CMA decision, which is globally binding.

Microsoft’s Smith met with with UK Chancellor Jeremy Hunt this month to discuss the deal. When the CMA vetoed the deal in April, Smith said he was “very disappointed” with the decision, which he said had shaken “people’s confidence in technology in the UK.”

The FTC first sued to block the deal in December in its in-house court, arguing the acquisition would harm competition in the US video game market. That FTC complaint doesn’t prevent Microsoft from closing the deal, leading to the FTC’s move to ask a federal judge to block the transaction.

The agency’s trial is set to begin Aug. 2, but isn’t likely to produce a decision till the end of the year.

(Updates with details on filing throughout)

To contact the reporters on this story:
Leah Nylen in Washington at lnylen2@bloomberg.net;
Anna Edgerton in Washington at aedgerton@bloomberg.net

To contact the editor responsible for this story:
Sara Forden at sforden@bloomberg.net

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