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Microsoft Wants to Stay Gamers’ Suit to Block Activision Merger Until Regulatory Inquiries Resolve

Game controllers and computer peripherals.


Less than a month after the filing of a private suit against Microsoft seeking to halt, by preliminary injunction, the multibillion dollar acquisition of game developer and distributor Activision Blizzard by Microsoft, the latter has asked for a stay pending completion of any regulatory proceedings, such as those brought by the European Commission (EC) and Federal Trade Commission (FTC) that would prevent the parties from closing their proposed transaction.

Microsoft recounted that the FTC and the plaintiffs in the private action allege that the proposed $68.7 billion acquisition would lessen competition in the video game industry in violation of the Clayton Act. Both sets of plaintiffs also pointed to the likelihood of Microsoft obtaining far-outsized market power with the ability to foreclose rivals, limit output, reduce consumer choice, and hike game prices.

“The only practical distinction between the complaints is Plaintiffs are seeking a preliminary injunction, whereas the FTC presently is not,” the motion to stay noted.

Now, Microsoft says that judicial efficiency favors pausing the private suit on grounds that “[t]here is nothing to preliminarily enjoin.” The filing notes that Microsoft and Blizzard have been working to resolve issues with regulators around the globe as the transaction must be approved by July 18, 2023, its expiry date.

Yet, the motion notes that many reviews remain ongoing, with two in Europe not scheduled to conclude until mid- and late-April. Further, Microsoft says that the FTC has suggested that it may pursue a preliminary injunction to stop the transaction from closing pending the outcome of its lawsuit.    

With “no reason to litigate this case right now,” Microsoft claims that judicial economy favors staying this action to avoid needless and duplicative litigation and the risk of inconsistent rulings on identical issues between the private and FTC cases.

The plaintiffs are represented by Alioto Law Firm and Joseph Saveri Law Firm LLP and Microsoft by Wilkinson Stekloff LLP and Alston & Bird LLP.

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