The Federal Trade Commission will try to block the tech giant Microsoft from acquiring the gaming powerhouse Activision Blizzard, according to a person familiar with the matter.
The agency will be filing for a temporary restraining order in the northern district of California, according to the knowledgeable source, who was not authorized to comment publicly.
“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-based 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 Chief Executive 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 firm denied all wrongdoing. Nadella has expressed ambitions of changing the company’s culture.
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.-based corporation but also 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.
Earlier this year, the Microsoft-Activision deal cleared regulatory hurdles in both Japan and Britain.
The FTC did not respond to an email requesting comment on the matter.
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