Well, it didn’t take long for the Federal Trade Commission’s (FTC) injunction against Microsoft to reach the desk of judge. A district judge based out of Northern California, Edward J. Davilla, has officially granted the FTC their injunction and issued a restraining order on Microsoft, preventing them from finalizing their deal to acquire Activision Blizzard. This order will remain in place until the court has a ruling on a preliminary hearing, which is slated to take place on June 22.
In addition, there will be a second day of hearings right after on June 23, both of which will occur in the San Francisco courthouse. Both Microsoft and Activision will need to submit legal arguments in order to oppose the injunction by no later than June 16, which is this Friday. The FTC is required to reply by no later than next Tuesday, June 20. In making these specific dates at this specific time frame, this action will more than likely result in Microsoft being unable to close the acquisition by the July 18 deadline. Should the transaction pass that date, then Microsoft is obligated to pay Activision Blizzard a $3 million breakup fee.
It’s important to note that this restraining order only prevents Microsoft from fully acquiring the company. Both parties should still be able to extend that deadline without violating any court order. However, it’s highly probable that Microsoft wants to end this injunction before that possibility arises. As we’ve already mentioned before, both companies appear to be more than up to the task in taking this injunction down, with the idea that this will bring the issue to the forefront and expedite the overall legal process, allowing them to close the deal. Even if they overcome this hurdle, there’s still the major obstacle: the UK Watchdog Committee, who announced in April that they were blocking the deal. The saga of the legality with the transaction continues to make serous waves within the video game industry, and will have some serious ramifications no matter which way this ends up turning out.