FTC sues to stop Microsoft-Activision deal over antitrust concerns

The Federal Trade Commission (FTC) on Monday sued to stop the merger of Microsoft with Activision Blizzard, asking a court for a temporary restraining order to halt the $69 billion deal.

Both U.S. and U.K. regulators oppose the merger over antitrust concerns that it could dampen competition in the video game market.

Microsoft makes the Xbox gaming system and operates a cloud-based video game streaming service. California-based Activision Blizzard’s crown gaming jewels include “Call of Duty,” “World of Warcraft” and “Candy Crush.”

The FTC filed in federal court in San Francisco on Monday seeking the restraining order and an injunction.

Some countries have approved the deal. The European Union handed down its decision in favor of it on May 15, after an in-depth investigation showed that there wasn’t enough evidence that Microsoft’s actions would have a negative impact on competition.

A merger could give Microsoft the power to change up Activision’s game development and operations, as well as giving it access to sensitive information and enabling the tech behemoth to lay off key personnel.

The FTC’s lawsuit is an attempt to buy more time for review so that the two companies cannot close their deal without fuller scrutiny, the agency said in its court petition.

The deadline to close the deal is a month away, under the contract Microsoft signed with Activision. An earlier action that the FTC filed against the acquisition is an in-house administrative proceeding rather than a court case, with a trial set for Aug. 2. That filing would not stop the deal from going through.

Both Microsoft and Activision said the FTC’s deal-blocking attempt would allow them to state their cases before a judge, as Activision CEO Bobby Kotick wrote in a letter to employees.

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

With News Wire Services