FTC reportedly seeks injunction to stop Microsoft’s Activision Blizzard deal

Update: The FTC confirms that it has requested a “temporary restraining order” preventing the deal from going through while reviews are underway. Original story follows this statement from the agency:

Microsoft and Activision Blizzard have represented in the past that they cannot close their deal due to antitrust reviews of the transaction in other jurisdictions. But Microsoft and Activision have not provided assurances that they will maintain that position. In light of that, and public reporting that Microsoft and Activision Blizzard are considering closing their deal imminently, we have filed a request for a temporary restraining order to prevent them from closing while review continues.

Microsoft’s proposed $68.7 billion acquisition of Activision Blizzard has received a mixed response from regulators around the world, but the Federal Trade Commission may be its biggest critic. The agency has reportedly applied for an injunction to prevent the deal going ahead before its own official judgment on the situation later this year.

Microsoft announced its intention to buy the gaming giant early last year as a way to bolster its own Xbox and PC gaming division, which has struggled to outplay perennial rival Sony. (Though yesterday’s impressive Xbox showcase clearly indicates that the war is far from over.)

This was followed by a flurry of concerned statements from antitrust regulators around the world, who said industry consolidation like this produces few benefits and plenty of risks for consumers. Several investigations are underway, and the U.K. has even moved to block the deal, though that is being appealed in court there.

Cue the FTC, which already has a lawsuit challenging the acquisition, but that is not scheduled to be heard by its own administrative law judge until August. So the agency is reportedly asking for an injunction against the deal now — essentially, asking a judge to pre-judge whether the lawsuit is likely to succeed, whether harm could occur during the legal process, and if so prevent the deal from going forward in the meantime. CNBC first reported the move.

The agency did have a closed-door meeting this morning for “consideration of a nonpublic law enforcement matter,” which very well could be the matter in question.

Such decisions generally require the case to be pretty clear, though, and this one may not be. When it filed the lawsuit, the FTC said “we seek to stop Microsoft from gaining control over a leading independent game studio and using it to harm competition in multiple dynamic and fast-growing gaming markets.”

To call Activision Blizzard an “independent game studio” is something of a stretch: The enormous conjoined corporation is responsible for some of the world’s most popular games, including Diablo IV, which just set launch sales records last week — across all platforms, it must be said. And Microsoft has been careful to state its support for multiple platforms on many of its own marquee titles since the acquisition announcement.

I have contacted the FTC for confirmation and more details and will update this post if I hear back.