Activision Deal Likely to Pass in UK as the CMA Stays Legal Battle for Further Negotiations

Today Microsoft scored a major victory in their quest to get their proposed $69 billion acquisition of Activision Blizzard approved by regulators. The U.S. Federal Trade Commission had filed a preliminary injunction to block the deal before its July 18 deadline, but today a federal judge sided firmly with Microsoft in the matter. Microsoft will still face FTC hearings in August, but most of their arguments have just been roundly rejected in court, so the case doesn’t look good.

Of course, Microsoft hasn’t had a perfect record of victories with regulators. While they seem to have defeated the FTC, back in April the UK’s Competition and Markets Authority blocked the Activision Blizzard deal, a decision that Microsoft quickly appealed. Well, in light of the FTC’s decision, it seems the CMA is reconsidering its stance. The CMA has announced they’ve agreed to pause appeal proceedings and give Microsoft a chance to propose additional changes to the deal that might get it approved.

“We stand ready to consider any proposals from Microsoft to restructure the transaction in a way that would address the concerns set out in our Final Report. In order to be able to prioritise work on these proposals, Microsoft and Activision have agreed with the CMA that a stay of litigation in the UK would be in the public interest and all parties have made a joint submission to the Competition Appeal Tribunal to this effect."

Microsoft president Brad Smith released his own statement, saying Microsoft is open to addressing the CMA’s concerns, even if they don’t necessarily agree with them…

“Our focus now turns back to the UK. While we ultimately disagree with the CMA’s concerns, we are considering how the transaction might be modified in order to address those concerns in a way that is acceptable to the CMA. In order to prioritize work on these proposals, Microsoft and Activision have agreed with the CMA that a stay of the litigation in the UK would be in the public interest and the parties have made a joint submission to the Competition Appeal Tribunal to this effect.”

The CMA’s objection to the Activision Blizzard deal wasn’t so much about PlayStation vs. Xbox, but the advantage Call of Duty exclusivity could conceivably give Microsoft in the growing cloud gaming market down the line. It will be interesting to see what concessions Microsoft may make to ease the CMA’s minds about that.

You can keep up with the latest happenings in the Activision Blizzard acquisition saga here.

Written by Nathan Birch