Britain’s antitrust regulator, the Competition and Markets Authority (CMA), is once again reviewing Microsoft’s proposed acquisition of Call of Duty maker, Activision Blizzard. The CMA initially blocked the $69 billion deal in April due to concerns about its impact on competition in the cloud gaming market. However, Microsoft has presented new arguments for reconsideration, and the CMA has reopened the case after finding itself isolated among global regulators.
Microsoft’s main argument is based on the binding commitments it made to the European Union. Shortly after the UK’s block, the software giant made legally-binding commitments to European authorities, including a promise to stream Activision games for a decade after the merger. Additionally, Microsoft has entered into agreements with Nvidia, Boosteroid, and Ubitus. These commitments, along with the establishment of a monitoring and enforcement regime, address some of the CMA’s concerns.
Furthermore, Microsoft contends that the CMA’s proposed block extends beyond what is necessary to address its cloud gaming concerns. The CMA’s proposal includes coverage of Activision Blizzard’s mobile gaming unit, King, which develops popular games like Candy Crush Saga. Microsoft argues that this is an unnecessary inclusion.
Relevance of Recent Licensing Deal and US Court Failure
Microsoft also highlights two additional factors that should influence the reconsideration. Firstly, the company points to a recent licensing deal it reached with Sony, claiming that it constitutes a material change of circumstance. Secondly, Microsoft argues that the CMA should not consider the failure of US authorities to block the deal in American courts as relevant to its decision.
The CMA, however, dismisses these arguments as “irrelevant and immaterial.” The regulator maintains that it is solely focused on the potential impact of the deal on the UK market and competition. The CMA’s decision to revisit the case is based on its belief that the binding commitments made by Microsoft to the European Union warrant a reassessment.
The Competition Appeal Tribunal provisionally approved the adjournment, subject to further submissions from the involved parties. The final decision on the reconsideration is expected to be reached in the week beginning August 7.
Microsoft’s Activision Blizzard deal is once again under scrutiny by Britain’s antitrust regulator. Microsoft has presented compelling arguments for the CMA to reconsider its initial block, including the binding commitments made to the European Union and the establishment of a monitoring and enforcement regime. However, the CMA maintains that its decision will be based solely on the potential impact of the deal on the UK market. The final outcome of this case will be determined in the coming weeks.
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