Activision Blizzard deal | Microsoft’s grounds for appeal detailed

Microsoft deal blocked

The CMA made “fundamental errors” when it blocked Microsoft’s proposed Activision Blizzard deal, the latter’s appeal document states.


In a saga that is by turns intriguing and filled with beige corporate speak, Microsoft has faced one major opponent in its proposed acquisition of Activision Blizzard: the UK’s Competition and Markets Authority.

In April, the CMA blocked Microsoft’s deal – worth a reported $68 billion or more – on the grounds that it could lead to “less innovation and choice” for gamers.

Microsoft didn’t exactly hide its frustration at the verdict, with president Brad Smith telling the BBC that it was “probably the darkest day in our four decades in Britain,” and adding, ominously, that the EU was a “more attractive place to start a business than the UK.”

Microsoft has since filed an appeal against the CMA to the UK’s Competition Appeal Tribunal, and – as spotted by Gamespot's Hayley Williams – the corporation’s official filing was recently published online.

Said document lays out five grounds for appeal, with the most eye-catching of these arguments being that the CMA made “fundamental errors in its assessment” when it came to cloud gaming services.

In its April ruling, the CMA argued that Microsoft’s Activision Blizzard takeover would make it too dominant in the (relatively) nascent market for cloud gaming. Microsoft’s appeal argues that cloud gaming shouldn’t be considered separate from the wider games sector, since consumers have the ability to choose between buying games hosted in the cloud or purchasing the same software via a disc or download.

The appeal also suggests, among other things, that the CMA hasn’t taken into account Microsoft’s licencing deals, which would see Activision Blizzard games appear on Sony and Nintendo platforms.

Microsoft is requesting that the CMA’s decision not only be reversed, but that the body also pays for the company’s legal costs and “further or other relief as the Tribunal sees fit.”

Will Microsoft win its appeal? We’ll have to wait and see. As several legal experts told us when we spoke to them last month, getting the appeal approved in the UK remains a huge roadblock for Microsoft. “If they don’t win the appeal,” Sheridans lawyer Anna Poulter-Jones told us, “the deal is dead.”

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