FTC seeks federal court orders to stall Microsoft-Activision merger

The FTC seeks federal court orders to temporarily prohibit Microsoft from merging with Activision until its internal administrative lawsuit is complete.

2 minutes & 24 seconds read time

The Federal Trade Commission asks federal courts to intervene by issuing orders that would halt and temporarily prevent the Microsoft-Activision merger from closing.

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Microsoft wants to buy Activision for $68.7 billion and acquire some of the most profitable video games on the planet. The Federal Trade Commission is wary of the merger, and has scrutinized the deal in a heavy Phase 2 investigation of millions of business documents and submissions. During its investigation, the FTC identified antitrust concerns and determined that the merger would harm competition. The Commission then opened an administrative lawsuit against Microsoft and is now challenging the merger in its internal courts.

Although the deal is currently in active litigation with the FTC, Microsoft and Activision can still merge in an action known as a "close over". The FTC notes that Microsoft and Activision intend to close the merger after June 15.

This has prompted the FTC to request orders from federal courts. The Commission has filed a complaint that seeks both a temporary restraining order (TRO) and a preliminary injunction (PI) from the Northern District Court of California.

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Time is of the essence. The FTC wants to complete its administrative lawsuit before Microsoft and Activision have the option to close the merger and combine with one another.

The temporary restraining order (TRO) would temporarily prohibit Microsoft and Activision from merging until the district judge (in this case, Judge Vince Chhabria) made a decision on whether or not to issue a preliminary injunction.

"Their refusal to wait to complete their transaction while this Court decides whether to grant a preliminary injunction necessitates entry of the requested TRO," FTC legal counsel writes in the complaint.

"Unless temporarily restrained and preliminarily enjoined by this Court, Defendants have represented that they that they may consummate the Proposed Acquisition at any time after June 15, 2023."

The FTC's main goal is to secure a very specific preliminary injunction.

The government agency is asking California district courts to issue a preliminary injunction that would also bar and prohibit Microsoft and Activision from merging until after the Commission's administrative lawsuit is complete.

An evidentiary hearing for the FTC's administrative lawsuit is scheduled for August 2, 2023.

"Fact discovery in the administrative proceeding has closed, expert reports have been served, and final witness lists and exhibit lists have been exchanged. The parties have scheduled expert depositions through the end of June, and motions in limine and pretrial briefs are due in July," the FTC writes in the complaint.

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Elsewhere in the filing, the FTC says that it is confident it can prove the anti-competitive effects that would arise from the merger, and that its case is strong enough to warrant at temporary restraining order.

The Commission also says that if no action is taken, Microsoft and Activision could start executing plans that would harm competition the video games market, including making new business deals, altering existing plans, making new contracts, laying off workers, and information exchanges between the companies.

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NEWS SOURCE:courtlistener.com

Derek joined the TweakTown team in 2015 and has since reviewed and played 1000s of hours of new games. Derek is absorbed with the intersection of technology and gaming, and is always looking forward to new advancements. With over six years in games journalism under his belt, Derek aims to further engage the gaming sector while taking a peek under the tech that powers it. He hopes to one day explore the stars in No Man's Sky with the magic of VR.

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