MS·Blizzard Big Deal in Limbo... US Court Grants Injunction

A U.S. federal court has ordered Microsoft (MS) to halt its $88 trillion-scale big deal to acquire Activision Blizzard. As a result, MS's planned completion of the Blizzard acquisition scheduled for the 18th of next month is expected to be canceled.

According to major foreign media including CNN on the 13th (local time), the U.S. District Court in California granted the preliminary injunction requested by the U.S. Federal Trade Commission (FTC) to block MS's acquisition of Blizzard.

Judge Edward Davila explained the reason for granting the injunction, stating, "It is necessary to maintain the status quo while the lawsuit is pending, to order effective remedies if the court finds the injunction appropriate, and to preserve the FTC's ability to enforce effective and permanent relief if it wins the lawsuit."

Earlier, on the 12th, the FTC filed a preliminary injunction request to prevent the completion of MS's acquisition of Blizzard. The FTC argued that if the deal goes through without the judge's decision, MS could change Blizzard's operations and business plans and gain access to sensitive business information, which was the reason for the injunction request.

At the end of last year, the FTC filed a lawsuit to block the acquisition, claiming that MS could abuse its market position by exclusively releasing blockbuster Blizzard games on its game subscription service "Game Pass" and blocking other game companies from entering the market. The trial for this lawsuit is set to begin on August 2, but the FTC sought temporary relief from the federal court through the injunction request to block MS's acquisition beforehand.

MS and Blizzard must submit documents opposing the injunction by the 16th, and the FTC must respond by the 20th. Judge Davila plans to hold hearings on the FTC's injunction request over two days, on the 22nd and 23rd.

MS had planned to complete the acquisition work before the deal's closing date of the 18th of next month, but foreign media reported that the court's injunction has caused disruptions to the acquisition process.

[Photo by Reuters]

MS's Blizzard acquisition announced early last year is the largest merger and acquisition deal MS has pursued to date, amounting to $68.7 billion (approximately 88 trillion won), and final approvals from countries including the U.S. and the U.K. have not yet been granted.

As a latecomer in the gaming market, MS has been actively expanding its size through aggressive merger and acquisition strategies to increase market share. By acquiring the gaming giant Blizzard, MS has risen to stand shoulder to shoulder with China's Tencent and Japan's Sony as a major gaming company. Consequently, competition authorities in various countries have raised concerns that MS might disrupt fair competition by leveraging its dominance in the PC market.

Unlike the U.S., the European Union (EU) regulatory authorities conditionally approved MS's acquisition of Blizzard last month. The EU Commission stated, "On the 15th of last month, we accepted MS's proposal to allow cloud gaming platforms to provide streaming services without paying royalties."