FTC Sues to Block Massive Tech Deal

The Federal Trade Commission has sued to block Microsoft from completing its deal to buy video game company Activision Blizzard, the latest antitrust challenge to the proposed merger but one that could hasten its conclusion. The FTC's Monday filing in a federal court in San Francisco seeks a restraining order and injunction to stop Microsoft's $69 billion purchase of the California gaming company behind hit franchises such as Call of Duty and World of Warcraft, the AP reports. Microsoft, maker of the Xbox game system, has been struggling to win worldwide approval for the deal with just over a month before the deadline to close it, according to the contract it signed with Activision.

"We welcome the opportunity to present our case in federal court," said a statement Monday from Brad Smith, Microsoft's vice chair and president. "We believe accelerating the legal process in the US will ultimately bring more choice and competition to the market." The FTC already took Microsoft to court to block the merger, but that was before the US agency's in-house judge in a trial set to start on Aug. 2. That administrative process doesn't preclude the parties from closing the deal. The contract between Microsoft and Activision required the deal to close by July 18, but the FTC's latest action seeks to stop that from happening.

"In light of ... public reporting that Microsoft and Activision Blizzard are considering closing their deal imminently, we have filed a request for a temporary restraining order to prevent them from closing while review continues," the FTC said in a statement Monday. Microsoft's other main obstacle is in the United Kingdom, where antitrust regulators have also taken action to block the acquisition.

story continues below

The all-cash deal announced in January 2022 has been scrutinized by regulators around the world over fears that it would give Microsoft and its Xbox console control of Activision's hit franchises and give it an unfair boost in the emerging business of cloud-based game subscriptions. It could be the priciest tech industry merger in history. (More Microsoft stories.)