Microsoft Takes on UK's CMA Again [Update: CMA Extends Decision Period]

Source: Source Justin Sullivan / Getty Images.

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Update #3

The CMA has just extended the deadline for issuing the order as part of the investigation surrounding Microsoft and Activision Blizzard. The new one has been set for six weeks from now - it falls on August 29 - due to "special reasons." Nevertheless, the CMA intends to make a decision as soon as possible, possibly before that date. Perhaps it was influenced by Microsoft's new offer.

Update #2

The situation is dynamic - Microsoft is apparently able to accede to the CMA's demands. As reported by Bloomberg, the Xbox maker may give up some control of the UK cloud gaming market in order to finalize the acquisition. This could include selling the rights to the UK cloud gaming market to a telecommunications, gaming or cloud computing company. This is to be part of CMA's expected "restructuring of the deal."

Update #1

Update

As we read on Reuters, the UK Competition and Markets Authority announced today that it will not accept new remedies from Microsoft and Activision after blocking their merger, but will consider a restructured deal, which may however require a new investigation.

Original post (July 11, 2023)

Commenting on the favorable decision of US court on the merger between Microsoft and Activision Blizzard, the CEO of the latter company, Bobby Kotick, expressed hope that it will be a beacon of sorts for regulators around the world. First and foremost, of course, is the UK's Competition and Markets Authority (CMA), which in April did not approve this acquisition, as it considered that it "could result in higher prices, more modest offerings and less innovation for players in the UK - especially when it comes to cloud services."

The Redmond giant announced that it would appeal the decision. It did so a month later, arguing that the British regulator had made five significant errors during its investigation. This brought the case to the UK's Competition Appeal Tribunal (CAT), known for its highly restrictive approach.

A hearing has been set for July 28... but it's possible that it won't happen. Microsoft's executive vice chairman, Brad Smith, wrote today on Twitter, that after its success in the United States, the Redmond giant will refocus on the UK and will try to address CMA's concerns. It may be necessary to modify some of the existing assumptions of the deal.

Thus the appeal process initiated by Microsoft has been put on hold - both parties have filed an application with the CAT on the matter.

Source: Twitter / Brad Smith.

As reported by The Verge, UK regulator is said to be "ready to consider any proposals from Microsoft to modify the provisions of the deal in a way that would address the concerns in its final report." Significantly, the announcement published by Brad Smith stands that the Redmond giant still categorically disagrees with CMA's opinion - but seems willing to make some concessions.

This is not surprising - Microsoft is anxious for time, since if it does not finalize the merger with Activision Blizzard by July 18, 2023, it will be necessary to renegotiate the deal. In the absence of a renewed agreement between the parties, the Redmond giant would have to pay AB $3 billion for breaking the deal.

Meanwhile, it has been reported that Microsoft is considering a Plan B, allegedly to withdraw all Activision Blizzard games from the UK. Certainly the company would be reluctant to make such a move, but then at least they wouldn't have to "make a deal" with the CMA. Therefore, it can be expected that the "soap opera", which we have indirectly witnessed for nearly eighteen months, will end in the next few days - one way or another.