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FTC Files Temporary Restraining Order and Preliminary Injunction Against Microsoft

Posted June 12, 2023 | Activision Blizzard | Antitrust | Games | Mobile gaming | Playstation | Project Xcloud | Windows | Xbox

The U.S. Federal Trade Commission (FTC) today filed a lawsuit against Microsoft to prevent it from acquiring Activision Blizzard ahead of the deal’s July 18 deadline.

“Plaintiff Federal Trade Commission, by its designated attorneys, petitions this Court to enter a temporary restraining order and grant a preliminary injunction enjoining Defendants Microsoft Corp. and Activision Blizzard, Inc. from consummating their proposed acquisition or a similar transaction,” the filing reads. “Both a temporary restraining order and a preliminary injunction are necessary because Microsoft and Activision have represented that they may consummate the Proposed Acquisition at any time [redacted] without any further notice to the Commission. A preliminary injunction is necessary to maintain the status quo and prevent interim harm to competition during the pendency of the FTC’s administrative proceeding to determine whether the Proposed Acquisition violates U.S. antitrust law. A temporary restraining order is necessary to maintain the status quo while this Court decides whether to grant the requested preliminary injunction.”

So that is interesting: sources close to Microsoft indicated last week that the software giant was considering a strategy in which it simply ignores the UK Competition and Market Authority (CMA) order blocking the acquisition. And we know that the CMA and FTC have been working together behind the scenes to present similar arguments against the acquisition. So this filing was made to prevent that from happening.

“Press reports began circulating suggesting that Defendants were seriously contemplating closing the Proposed Acquisition despite the pending administrative litigation and the CMA Orders,” the filing notes. It’s like the antitrust version of declaring Microsoft and Activision Blizzard a flight risk.

The rest of the filing is anti-Activision Blizzard boilerplate and stands contrary to the facts and common sense.

“The Proposed Acquisition is reasonably likely to substantially lessen competition or tend to create a monopoly in multiple markets because it will create a combined firm with the ability and increased incentive to use its control of Activision titles to disadvantage Microsoft’s competitors,” it notes incorrectly. “Microsoft’s ownership of Activision would provide Microsoft with the ability to withhold or degrade Activision content through various means, including manipulating Activision’s pricing, degrading game quality or player experience on rival offerings, changing the terms and timing of access to Activision’s content, or withholding content from competitors entirely.”

In other words, it’s the same tired nonsense that Sony started spouting the second that Microsoft announced its acquisition plans in January 2022. Indeed, Sony president Jim Ryan confirmed to Activision Blizzard that he “doesn’t want a new Call of Duty deal, [he] just wants to block your merger.”

Today’s filing follows a December 2022 filing in which the FTC sued to block the acquisition.

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

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