The FTC’s TRO was granted to block the Microsoft Activision deal.
Yesterday, we reported on the FTC’s decision to bring their Microsoft Activision suit to a federal court, making it the third case filed to stop the deal in the US. They filed for both a preliminary injunction and a temporary restraining order. The temporary restraining order was granted immediately, with a trial now scheduled in regards to if the preliminary injunction will also be granted.
As Florian Mueller explains, whether the injunction will be granted or not will be based on the actual merits on the case. This means that the FTC will have to use the arguments that 40 other countries and regions did not accept to block the deal, or come up with new ones.
Potential arguments they can use include the console gaming theory of harm, and the cloud gaming theory of harm. If you may remember, the CMA themselves rejected the console gaming theory. And when they chose cloud gaming as rationale for ‘preventing’ the deal, they then became subject to scrutiny from other members of the UK government. Now that CMA decision is going up to the Competition Appeals Tribunal.
These are proven weak arguments, and unless the FTC can come up with others, they are not likely to get their injunction.
To complicate matters for the FTC further, the judge assigned to their federal case vs the Microsoft Activision deal is Judge Jacqueline Scott Corley. This is the same judge presiding over the so-called ‘gamer’s lawsuit’ vs the deal, which was also filed in San Francisco, California.
This is potentially problematic for the FTC because Judge Corley had already rejected many arguments filed in the gamer’s lawsuit. For the state of California, assigning the same judge to both cases was simply a manner of convenience as she already knew the case.
But FTC has at least played one card with their federal case, possibly the final one that they can play. As Florian has pointed out, the FTC always gets a TRO when they request one.
In Florian’s words, the TRO is ‘just a scheduling order’ and doesn’t solve the issues the FTC will ultimately have to face. But until Judge Corley throws out this case, the TRO will stay in effect. Florian believes Judge Corley will do exactly that on June 30, 2023 the very end of this month.
If Florian’s prediction proves correct, the earliest date that Microsoft and Activision can finalize their deal will be the following Monday, which happens to be July 3, 2023. That will be two weeks before their self-appointed deadline of July 18, 2023.
Now, Microsoft also has that pending appeal to approve their case in the UK on July 24, 2023, but Microsoft may choose to close the deal before then.
As you can see, the clock is winding down, not only for the Microsoft Activision deal, but also the cases against it. They may even miss that deadline and still close it after. Credit Microsoft’s and Activision’s determination here, but it may only be a matter of weeks before this ordeal of regulation is finally over and the deal will be done.
