US Judge Grants Restraining Order in Microsoft-Activision Deal

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Facts

  • On Tuesday, a federal district court judge in California granted a request from the US Federal Trade Commission (FTC) to block Microsoft’s acquisition of Activision Blizzard by issuing a temporary restraining order.1
  • However, Judge Edward Davila didn’t rule on the request for a preliminary injunction. A different judge will oversee a hearing on that aspect on June 22 or 23.1
  • The FTC has argued that Microsoft’s $69B buyout of the maker of the video game Call of Duty would unfairly give it exclusive rights to Activision games. Similarly, British competition authorities have blocked the deal, but it has been approved by the EU.2
  • Davila said the temporary restraining order is “necessary to maintain the status quo” as this case moves forward.3
  • Microsoft and Activision reached an agreement in January 2022, setting a July 18, 2023 deadline to complete the deal. The two sides could negotiate an extension.4
  • If the deal falls through, Microsoft must pay a $3B breakup fee.4

Sources: 1Yahoo Finance, 2Guardian, 3Barrons, and 4Forbes.

Narratives

  • Pro-establishment narrative, as provided by New York Times. The FTC has made it its mission to rein in big tech and other large companies to protect consumers — this suit is the latest blow against an attempt at creating a monopoly. Best of all, countries around the world are uniting to fight these types of deals to limit the scope of Microsoft, Google, Meta, and Amazon.
  • Establishment-critical narrative, as provided by New York Post. The FTC, and other worldwide regulatory bodies, are overreaching and harming both innovation and the profitability of these companies just to be spiteful. In this case, Microsoft has made numerous concessions to prove it’s not going to harm consumers — yet it’s still being forced to make its case in court.