In a surprising turn of events, a federal court issued a temporary restraining order against Microsoft's $68.7 billion acquisition of Activision Blizzard. This comes after the Federal Trade Commission (FTC) filed a preliminary injunction request on Monday against the deal. This development adds to the series of events surrounding the pending purchase, potentially complicating Microsoft's efforts to complete the transaction before the agreed deadline.

Since its announcement in January 2022, Microsoft's acquisition of Activision Blizzard has faced intense scrutiny from regulators and competitors. In December, the FTC moved to sue Microsoft over the purchase, although it did not necessarily block the deal. Following the UK Competition and Markets Authority's (CMA) decision to block the acquisition, the FTC filed its preliminary injunction request, which the federal court has now granted.

According to the court order, Microsoft and Activision cannot complete the deal until "after 11:59 p.m. Pacific time on the fifth business day after the court rules on the FTC's motion for a preliminary injunction. Alternatively, a later date set by the court may apply. The court has scheduled an evidentiary hearing on the preliminary injunction for June 22 and 23, making it unlikely that the deal will be completed this month. The deadline to complete the deal is July 18, and if it is missed, Microsoft will pay a $3 billion breakup fee to Activision Blizzard.

Should the court grant the injunction, the FTC can proceed to build its legal case against the deal. Microsoft President Brad Smith has offered an optimistic response to the news, stating that the decision accelerates the process, benefiting all parties involved. Previously, it was suggested that Microsoft might complete the Activision transaction without the FTC's approval. The coming weeks will reveal how Microsoft's case unfolds in the face of these regulatory hurdles.

Aside from the FTC challenge, Microsoft is also grappling with the UK's CMA ruling, with its first appellate hearing scheduled for July 24. The outcome of this appeal will be closely watched, especially considering the European Union's approval of the acquisition. Regulatory bodies from Brazil to South Korea have already given the green light for the deal. Despite these approvals, it appears that Microsoft's ambitions to acquire Activision Blizzard might be on hold for a bit longer than anticipated.