Microsoft Activision

Federal judge blocks Microsoft/Activision deal temporarily

The temporary order issued by District Court Judge Jacqueline Corley doesn't do much to suggest which way the court is leaning

Microsoft Activision Blizzard Acquisition - Story 4 of 10

A federal judge in the U.S. has issued a temporary restraining order blocking Microsoft’s acquisition of Activision, pending hearings on the preliminary injunction being sought by the Federal Trade Commission (FTC) in the case.

The temporary order issued by District Court Judge Jacqueline Corley doesn’t do much to suggest which way the court is leaning on the merits of the FTC’s case. A Microsoft spokesperson even acknowledged that “a temporary restraining order makes sense until we can receive a decision from the Court, which is moving swiftly.”

The order “maintain[s] the status quo,” as Judge Corley puts it, by preventing Microsoft and Activision from closing their deal while a more permanent decision on the injunction is pending. And while Microsoft and Activision have said in the past that they will wait for the regulatory process to finish before completing their proposed deal

The FTC say that they sought the restraining order based on “public reporting that Microsoft and Activision Blizzard are considering closing their deal imminently.”

The first hearing on the FTC’s preliminary injunction request is scheduled to start on June 22, giving Microsoft until Friday to file its initial response in the matter. That tight schedule might be to Microsoft’s overall benefit, as Activision CEO Bobby Kotick said Monday that the FTC’s federal injunction request “accelerates the legal process” and that their “excellent legal team has been preparing for this move for more than a year.”

If and when that injunction is granted, the deal will continue to be on pause as the FTC’s wider antitrust case moves forward.

Despite the speedy schedule, the current court timeline makes it extremely unlikely that Microsoft and Activision will be able to close their deal before a contractual July 18 deadline set when the acquisition was first proposed early last year.

While Microsoft would technically have to pay a significant “breakup fee” if that deadline isn’t met, both sides will likely renegotiate a later deadline pending the outcome of outstanding legal issues.

Microsoft and Activision are also appealing a UK government decision to block the merger based on competition concerns in the cloud gaming market. A hearing on that appeal is set for July 28.