Microsoft has followed its promise to appeal the CMA’s decision to block its acquisition of Activision Blizzard. The company has released a summary of its arguments for examination.
Microsoft’s Proposed Acquisition of Call of Duty Blocked by UK Authority
In April, the UK’s Competition and Market Authority surprised many by blocking Microsoft’s proposed $69 billion acquisition of the company that makes Call of Duty. The authority’s concern was focused on the cloud gaming industry, and they argued that the deal could stifle competition in this growing market.
Microsoft’s Disagreement with UK CMA’s Decision on Deal
The decision regarding the deal was met with mixed reactions. While some welcomed it, others rejected it. The European Union, which approved after Microsoft made some concessions, has been critical of the stance taken by the CMA. UK politicians, including Chancellor Jeremy Hunt, have also expressed their concerns. Microsoft has also voiced its disagreement with the decision and plans to appeal.
Microsoft challenges UK competition decision on cloud gaming services.
Microsoft will present its appeal to the UK’s Competition Appeal Tribunal, and a summary of its arguments is now available for review. The company challenges the decision on five critical grounds, starting with the claim that the CMA made “fundamental errors” by not considering constraints from native gaming when assessing Microsoft’s current position in cloud gaming services. Native gaming refers to playing a game on a device via digital download or disc.
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Microsoft Challenges UK Regulator’s Decision on Activision Merger
Microsoft has challenged the CMA’s decision regarding its merger with Activision. They believe that the CMA should have considered Microsoft’s three long-term commercial agreements with cloud gaming providers. Microsoft also disagrees with the CMA’s conclusion that Activision would have made its games available on cloud gaming services without the merger. They argue that the CMA’s findings suggest Microsoft would prevent rival cloud gaming services from accessing Activision’s gaming content after the acquisition, which is unlawful. Additionally, Microsoft claims that the CMA acted unlawfully by imposing a comprehensive remedy and failing to consider the interests of the comity. They also assert that the CMA was wrong to reject the Microsoft Cloud Remedy and breached Microsoft’s standard law duty of fairness and the CMA’s own remedies guidance.
Microsoft and Activision’s Appeal Process Following CMA’s Decision
Microsoft and Activision may undergo a long process if they appeal the CMA’s decision. The UK’s Competition Appeal Tribunal intends to handle simple cases within nine months. Even if the appeal is granted, it will still require a review by the CMA.