Microsoft has appealed the Competition and Markets Authority’s (CMA) decision to block its acquisition of Activision Blizzard. The company has outlined five key grounds on which it challenges the decision, including:
- The CMA made “fundamental errors” in its assessment of Microsoft’s current position in cloud gaming services.
- The CMA failed to take proper account of three long-term commercial agreements Microsoft entered into with cloud gaming providers.
- The CMA’s conclusion that Activision would have made its games available on cloud gaming services without the merger was “irrational” and “arrived at in a procedurally unfair manner.”
- The CMA’s findings that Microsoft would have the ability and incentive to foreclose rival cloud gaming services by withholding access to Activision’s gaming content after the acquisition are “unlawful.”
- The CMA erred in law by proceeding on the basis that it had a duty to impose what it described as a comprehensive remedy.
The appeal will likely be a lengthy process, and it is not yet clear whether Microsoft will be successful. However, the company is clearly determined to acquire Activision Blizzard, and it is likely to continue to fight the CMA’s decision.
In addition to the legal challenges, the acquisition also faces political opposition. Some UK politicians, including Chancellor Jeremy Hunt, have expressed concerns about the deal, and it is possible that the government could intervene to block it.
The outcome of the appeal is uncertain, but it is clear that the acquisition of Activision Blizzard is a major test for Microsoft and the gaming industry. If the deal is successful, it would give Microsoft a major foothold in the cloud gaming market and could reshape the competitive landscape. However, if the deal is blocked, it would be a major setback for Microsoft and could send a signal to other tech companies that regulators are willing to take a hard line on mergers and acquisitions.
