In an effort to prevent rivals from being squeezed out of the competition, U.S. regulators approved a request to block Activision Blizzard’s $69 billion purchase of technology colossus Microsoft.
According to the court, the temporary restraining order is “necessary to maintain the pendency of the complaint.”
The US Federal Trade Commission (FTC) said the deal “could substantially lessen competition in the sector”.
The case is scheduled to be heard in San Francisco from June 22 to 24.
If the deal with Activision Blizzard — the company behind Call of Duty and Candy Crush — goes through, it would be the biggest deal in the history of the video gaming industry.
According to JEE News, it has divided competition regulators in the UK, US and Europe.
The UK blocked the purchase while the European Union (EU) approved it. For the successful conclusion of the deal, Microsoft and Activision need approval from regulators in the US, UK and EU.
The FTC argued that the deal would give Microsoft’s Xbox console exclusive access to Activision games, leaving rivals Nintendo and Sony out in the cold.
The companies have a deadline of June 16 to submit their arguments opposing the preliminary injunction, and the FTC must respond by June 20.
Microsoft said the acquisition of Activision would benefit gaming companies and players.
It has offered to sign a legally binding agreement with the FTC to provide Call of Duty games to competitors, including Sony, for a decade.
The European Commission approved the acquisition and said Microsoft’s offer of 10-year free licensing deals – which promise European consumers and cloud game streaming services access to Activision’s PC and console games – meant the market was fair. There will be competition.
But the UK’s Competition and Markets Authority (CMA) blocked the deal in April. He maintained that he was concerned that the takeover would offer less innovation and less choice for gamers.
The companies criticized the CMA’s decision and said they would file an appeal.
Microsoft president Brad Smith said it was the company’s “darkest day” in its four decades of operating in the UK.
In response to the FTC’s announcement on Monday, Smith noted that Microsoft welcomed the “opportunity to present its case in federal court” in an effort to convince US regulators to allow the deal to be completed.
“We believe that speeding up the legal process in the US will ultimately bring more choice and competition to the market,” he added.
The Activision purchase is seen as important for Microsoft, which is trying to compete with its main rival, Sony.
