© Reuters. FILE PHOTO: The Microsoft logo is seen on a smartphone placed on Activision Blizzard game characters shown in this illustration taken January 18, 2022. REUTERS/Dado Ruvic/Illustration
By David Shepardson
WASHINGTON (Reuters) – A U.S. judge late Tuesday granted the Federal Trade Commission (FTC) request for a temporary ban Microsoft Corporation (NASDAQ:) Activision Blizzard’s acquisition of video game maker (NASDAQ:) and a hearing is set for next week.
US District Judge Edward Davila has scheduled a two-day evidentiary hearing on the FTC’s request for a preliminary injunction to take place June 22-23 in San Francisco. Without a court order, Microsoft could have closed the $69 billion deal as early as Friday.
The Federal Trade Commission, which enforces antitrust law, asked an administrative judge to block the deal in early December. The evidentiary hearing in the administrative proceedings is scheduled to begin August 2.
Based on a hearing in late June, the federal court will decide whether a preliminary injunction — which will continue during administrative review of the case — is necessary. The Federal Trade Commission sought the temporary ban on Monday.
Davila said Tuesday’s temporary restraining order “is necessary to maintain the status quo while a complaint is pending (and) to preserve the ability of this court to order effective relief in the event it determines that a preliminary injunction is warranted and to preserve the ability of the FTC ) to obtain a permanent and effective remedy in the event of his victory in his pending administrative proceedings.”
Microsoft and Activision must present legal arguments against a preliminary injunction by June 16; The FTC should respond by June 20.
Activision, which said Monday that the FTC’s decision to seek a federal court order was a “welcome update and speeds up the legal process,” declined to comment Tuesday.
Microsoft said Tuesday that “accelerating the legal process in the United States will ultimately create more choice and competition in the gaming market. It makes sense to issue a temporary restraining order until we can get a court decision, which moves quickly.”
The Federal Trade Commission declined to comment.
Davila said the lockout bar will remain in effect until at least five days after the court rules on the initial injunction request.
The FTC argued that the deal would give Microsoft’s video game console exclusive access to Activision games, leaving Nintendo’s consoles and Sony (NYSE: Group Corp’s PlayStation in the cold.
The European Union approved Microsoft’s bid to acquire the “Call of Duty” video game maker in May, but UK competition authorities blocked the takeover in April.
Microsoft said the deal would benefit gamers and game companies alike, and offered to sign a legally binding consent decree with the Federal Trade Commission to make “Call of Duty” games available to competitors including Sony for a decade.
The case reflects the muscular approach to antitrust enforcement taken by US President Joe Biden’s administration.