FTC moves to block Microsoft’s Activision Blizzard acquisition

The Federal Trade Commission is moving to block the tech giant Microsoft from acquiring the gaming powerhouse Activision Blizzard, a spokesperson for the agency said.

“We have filed a request for a temporary restraining order to prevent them from closing while review continues,” the FTC spokesperson said, citing reports that the two companies could close the deal soon.

“We welcome the opportunity to present our case in federal court,” Brad Smith, Microsoft’s vice chair and president, said in a statement emailed to The Times. “We believe accelerating the legal process in the U.S. will ultimately bring more choice and competition to the market.”

In early 2022, Microsoft Chief Executive Satya Nadella announced a plan to buy Activision Blizzard — the Santa Monica maker of popular gaming franchises including “Call of Duty” and “World of Warcraft” — for $68.7 billion.

That push came after a protracted series of scandals in which Activision Blizzard employees alleged that the company, run by CEO Bobby Kotick, harbored a hostile, sexist, discriminatory workplace.

California’s Department of Fair Employment and Housing filed a lawsuit against the video game maker, and some employees sued.

A settlement with the federal Equal Employment Opportunity Commission led Activision to establish an $18-million fund for workers who experienced sexual harassment or discrimination at the company, among other types of workplace misconduct. The company denied all wrongdoing. Nadella has expressed ambitions of changing the company’s culture.

The FTC’s latest move “is a welcome update and one that accelerates the legal process,” Kotick said in a blog post Monday. “Our excellent legal team has been preparing for this move for more than a year, and we’re ready to present our case to a federal judge who can evaluate the transaction on the merits.”

Late last year, the FTC said it would seek to block the acquisition, saying that a merger would harm competition in the gaming market.

Microsoft’s bid to buy the gaming company came amid a wider acquisition spree by the Redmond, Wash., corporation and a crackdown on tech mergers by FTC Chair Lina Khan.

Under the Biden appointee’s leadership, the FTC has blocked mergers between Nvidia and SoftBank Group’s Arm Ltd. as well as Lockheed Martin and Aerojet Rocketdyne Holdings.

This year, the Microsoft-Activision deal cleared regulatory hurdles in both Japan and Britain.

“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,” the FTC spokesperson said in an email. “But Microsoft and Activision have not provided assurances that they will maintain that position.”