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Microsoft has said that a temporary block could scuttle the
deal. Courts do not usually take into account such real-world
consequences. But if the court pauses the deal, Microsoft and
Activision will have to agree to extend it past a July 18
termination date built into their original agreement.
In a scheduled five-day hearing before a federal judge in San
Francisco, the antitrust enforcer will argue it needs Microsoft
Corp and Activision Blizzard Inc to put their $69 billion merger
on hold until the agency's in-house court gets to rule on
whether the combination hurts competition in the video game
industry.
The FTC fears that without action by the federal court, the
combined firm "could alter Activision's operations and business
plans" and could allow Microsoft to access sensitive business
information.
The administrative hearing within the FTC is set to begin Aug.
2.
Resolving the U.S. lawsuit is one of several key antitrust
battles Microsoft and Activision have fought around the world to
get the deal finalized. Microsoft's bid to acquire the "Call of
Duty" videogame maker was approved by the EU in May, but British
competition authorities blocked the takeover in April.
The FTC has argued that the deal, which would be the largest for
Microsoft and the largest in the history of the video game
business, would give Microsoft the "ability and increased
incentive to withhold or degrade Activision’s content in ways
that substantially lessen competition."
In addition, the FTC, which asked its in-house administrative
court to block the deal in December, says the combination would
give Microsoft's Xbox video-game console exclusive access to
Activision games, leaving Nintendo consoles and Sony Group
Corp's PlayStation out in the cold.
Microsoft has said the deal would benefit gamers and gaming
companies alike, and it has offered to sign a legally binding
consent decree with the FTC to provide "Call of Duty" games to
rivals including Sony for a decade.
The hearing will begin June 22 and progress through June 29.
Microsoft CEO Satya Nadella and Activision CEO Bobby Kotick are
among the witnesses planned for a five-day evidentiary hearing.
(Reporting by Chris Sanders; Editing by Leslie Adler)
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