The U.S. Federal Trade Commission (FTC) asked a federal court on Thursday for a stay that would prevent Microsoft MSFT-Q from closing its US$69-billion purchase of Call of Duty maker Activision Blizzard ATVI-Q.
A federal judge had ruled for Microsoft on Tuesday, saying the agency had failed to show the deal would be illegal under antitrust law. The FTC appealed that loss late on Wednesday, and Microsoft has said it would fight that appeal.
In its motion, the FTC asked for an order that would prevent the deal from closing until after the 9th U.S. Circuit Court of Appeals has ruled on a separate stay request filed with that court.
Any outstanding regulatory hurdle makes it more likely the agreement between Microsoft and Activision will expire on July 18 without the deal having been completed. After July 18, either company will be free to walk away from the deal unless they negotiate an extension.
Shares of Microsoft and Activision were little changed by the news. Microsoft was up 1.7 per cent and Activision was down 0.3 per cent.
In its motion for the stay to Judge Jacqueline Scott Corley, the FTC argued her denial of a preliminary injunction to halt the deal “raises serious, substantial issues for the Court of Appeals to resolve.”
Specifically, the FTC said she had applied the wrong standard in considering the agency’s request for a preliminary injunction.
“Granting an injunction pending appeal is warranted because the FTC is likely to succeed on appeal,” the agency wrote.
The deal, the largest in the history of the video-game industry, was struggling in Britain until this week. After the ruling in California, Britain’s Competition and Markets Authority, which had opposed the transaction, said a restructured deal between Microsoft and Activision Blizzard could satisfy its concerns, subject to a new investigation.