Microsoft’s planned Activision Blizzard merger temporarily blocked by US judge

SAN FRANCISCO (AP) — Microsoft’s planned $69 billion purchase of video game company Activision Blizzard was blocked by a federal judge Tuesday, giving more time for an antitrust review of the deal.

U.S. District Judge Jacqueline Scott Corley in San Francisco ruled in support of a temporary restraining order sought by the Federal Trade Commission that will stop Microsoft from closing the deal.

In a court filing Monday, the commission had sought both a restraining order and injunction to stop Microsoft’s acquisition of the California company behind hit games such as Call of Duty, World of Warcraft and Candy Crush Saga.

Microsoft, maker of the Xbox game system, has spent months trying to win worldwide approval for the merger. While a number of countries have approved the acquisition, regulators for two important economies — the U.S. and the U.K. — have taken action to stop it, arguing it could suppress competition in the video game market.

The judge said her order temporarily blocking the deal “is necessary to maintain the status quo” while the Federal Trade Commission’s legal cases against it are still pending. The bar for issuing an urgent restraining order is lower than it is to issue a preliminary injunction blocking the deal. A hearing on the commission’s request for an injunction is set for June 22.

The trade commission already took Microsoft to court last year to block the merger, but that case was brought to the U.S. agency’s in-house judge in a trial set to start Aug. 2.

The commission said it brought its case to a federal court this week because it was concerned that Microsoft was trying to imminently close the deal before the trial begins, which would make it “difficult, if not impossible” to reverse course if the acquisition was later found to be illegal.

Microsoft said in a written statement late Tuesday that “accelerating the legal process in the U.S will ultimately bring more choice and competition to the gaming market.”

“A temporary restraining order makes sense until we can receive a decision from the Court, which is moving swiftly,” the company said.