A United States federal judge has temporarily blocked Microsoft from completing its $69 billion buyout of gaming giant, Activision Blizzard.
According to a court filing reported by AFP, Judge Edward Davila, on Tuesday, said in a ruling that it “is necessary to maintain the status quo” while the court considers a longer-term injunction on the purchase as requested by regulators at the Federal Trade Commission.
A hearing was set for June 22 and June 23 in San Francisco federal court to hear evidence in the matter, according to the ruling.The ruling came a day after the FTC asked a federal court prevent Microsoft from completing its blockbuster buy of Activision Blizzard as it considers regulatory action.
“A preliminary injunction is necessary to… prevent interim harm” while the FTC determines whether “the proposed acquisition violates US antitrust law,” the regulator said in the filing.
The ruling, therefore, bars Microsoft from moving forward with the deal before the court decides whether to issue a preliminary injunction sought by regulators.
In requesting the preliminary injunction at the Northern California District Court, the US government sought to prevent the companies from finalizing the deal before a July 18 deadline.
An FTC hearing is set for August to argue the merits of the deal, and a restraining order would block the accord before that process has run its course.
The California judge would need to agree to stop the deal after hearing arguments by the FTC on why the buyout is illegal and from Microsoft on why it should go ahead.
On Monday, Microsoft President Brad Smith said, “We welcome the opportunity to present our case in federal court.
“We believe accelerating the legal process in the US will ultimately bring more choice and competition to the market.”
Xbox-owner Microsoft launched a bid for Activision Blizzard early last year, seeking to establish the world’s third biggest gaming firm by revenue after China’s Tencent and Japan’s PlayStation maker Sony.
While the European Union has greenlit the deal, Britain’s Competition and Markets Authority blocked it in April, arguing it would harm competition in cloud gaming.
The FTC in December sued to block the transaction with Activision Blizzard, maker of the popular “Call of Duty” title, over concerns that it would stifle competition.