Microsoft has appealed the UK competition watchdog’s decision to deny its $69 billion (£56 billion) acquisition of Activision Blizzard, which created Call of Duty.
The US tech corporation acknowledged that it had formally appealed the Competition and Markets Authority’s (CMA) decision to reject the acquisition last month. Its case will be presented before the Competition Appeal Tribunal (CAT).
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Microsoft appeals against UK block on Activision Blizzard deal https://t.co/Ail716vAvq pic.twitter.com/6MmMB1ivbW
— Reuters (@Reuters) May 24, 2023
Activision claimed last month that the UK was “clearly closed for business” in light of the CMA’s findings. Xbox game console manufacturer Microsoft contended that the CMA’s action “discourages technology innovation and investment” in the UK.
The takeover, approved by the EU this month, has reportedly been struck a possibly fatal blow by the CMA judgment, according to legal experts.
Both the CMA and the European Commission, the executive branch of the EU, put a lot of attention on cloud gaming, which lets consumers stream video games stored on distant servers to their devices.
The commission agreed with the CMA’s assessment that the transaction would reduce competition in that market, but it also accepted Microsoft’s concessions.
In exchange for their cooperation, Microsoft will grant 10-year free licenses to European players who buy Activision PC and console games so they may stream them on other cloud gaming services. Popular games by Activision include Candy Crush, Hearthstone, and World of Warcraft.
Bobby Kotick, the CEO of Activision, claimed that the EU had “conducted an extremely thorough, deliberate process to gain a comprehensive understanding of gaming.”
Additionally, the agreement is being challenged in court by the Federal Trade Commission in the US. Sky News and Bloomberg were the first media outlets to report on the official appeal’s submission to the CAT.
Martin Coleman, the head of the independent panel of experts conducting the investigation, stated in April, when the CMA announced its decision, that “Microsoft already enjoys a powerful position and head start over other competitors in cloud gaming, and this deal would strengthen that advantage, giving it the ability to undermine new and innovative competitors.”
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According to Gareth Mills, partner at the UK law firm Charles Russell Speechlys, Microsoft was“willing to use their considerable resources to test the CMA’s resolve to stand behind their previous decision.”
He added: “The EU’s approval of the Activision acquisition (albeit with conditions attached) may give both parties an opportunity to find a third way, although such would represent a considerable change in tone and attitude from those currently being expressed.”