US judge temporarily halts Activision Blizzard buyout to Microsoft

In an attempt to prevent competitors from going out of the competition, US regulators were granted approval for a request to stop the buyout of Activision Blizzard to technology colossus Microsoft for $69 billion.

According to the court, the temporary restraining order “is necessary to maintain the status quo while the complaint is pending.”

The US Federal Trade Commission (FTC) said the deal could “substantially lessen competition in the sector”.

The hearing of the case is set to take place from June 22 to 24 in San Francisco.

If the deal with Activision Blizzard — a company behind Call of Duty and Candy Crush — is successful, it would be the biggest deal ever in the history of the video gaming industry.

According to BBC, it has split competition regulators in the UK, the US and Europe.

The UK restrained the buyout while the European Union (EU) approved it. For the successful conclusion of the deal, Microsoft and Activision require permission from the US, the UK and EU regulators.

The deal would give Microsoft’s Xbox console exclusive access to Activision games, leaving competitors Nintendo and Sony out in the cold, argued the FTC.

The companies have a time limit of June 16 to submit their arguments to oppose the preliminary injunction and the FTC will have to reply on 20 June.

Microsoft said a takeover 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 rivals including Sony for a decade.

The European Commission approved the acquisition and said that 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 — means there would be fair competition in the market.

But the UK’s Competition and Markets Authority (CMA) blocked the deal in April. It maintained that it was concerned the takeover would offer reduced innovation and less choice for gamers.

The companies criticized CMA’s decision and said they would file an appeal.

Brad Smith, Microsoft president said it marked the company’s “darkest day” in its four decades of working in Britain.

In response to the announcement by the FTC Monday, Smith noted that Microsoft welcomed the “opportunity to present our case in federal court” in its attempt to persuade US regulators to allow the deal to be completed.

“We believe accelerating the legal process in the US will ultimately bring more choice and competition to the market,” he added.

The buyout of Activision is regarded as crucial for Microsoft, which is trying to catch up with its main competitor Sony.