Microsoft has appealed the CMA’s decision to block its acquisition of Activision Blizzard, as announced, and the summary of the arguments is now available for review.
In April, after months of deliberations, Britain’s Competition and Markets Authority made the shocking decision to block Microsoft’s proposed $69 billion takeover of the Call of Duty maker. In doing so, she pointed to concerns about the burgeoning cloud gaming sector, arguing that the deal “could stifle competition in this growing market.”
It’s a position welcomed by some and rejected by others. The EU, which approved the deal in May after Microsoft made concessions, has expressed criticism of the CMA’s stance, and a number of British politicians, including Chancellor Jeremy Hunt, have also expressed concerns. Of course, Microsoft also criticized the decision and announced that it would appeal.
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This appeal requires Microsoft to bring its case to the UK Competition Appeal Tribunal and a summary of its arguments is now available for inspection. It sets out five main reasons Microsoft is challenging the decision, beginning with the allegation that the CMA made “fundamental errors in its assessment.” [Microsoft’s] The current position in cloud gaming services is hampered by the fact that it does not take into account the limitations of ‘native gaming’ (ie when consumers play a game on their device via digital download or disc).
It also alleges that the CMA “made a mistake by failing to adequately account for three long-term trade agreements.” [Microsoft] entered into with cloud gaming providers,” calling the CMA’s conclusion that Activision would have made its games available on cloud gaming services had it not been for the Merger as “irrational and procedurally unfair” and arguing that the CMA’s findings “Microsoft would have the “ability and incentive to foreclose competing cloud gaming services by denying access to Activision’s gaming content” would be “unlawful” post-acquisition.
Finally, Microsoft insists that the CMA “made an error of law in assuming that it had a duty to impose what it called a full remedy,” “unlawfully disregarded the interests of the comity,” and “an error acted when she denied Microsoft’s request.” Cloud Remedy and acted “hurt.” [Microsoft’s] common law’s duty of fairness and the CMA’s own remedies guidelines.”
Appealing the CMA’s decision will likely be a lengthy process for Microsoft and Activision; The UK’s Competition Appeal Tribunal says it aims to deal with straightforward cases within nine months. If the appeal is successful, she must go back to the CMA for review.
