UK Court Pauses Appeal in Microsoft-Activision Case

UK Court Pauses Appeal in Microsoft-Activision Case

News by Nikola DjuricNikola Djuric
Published: July 18, 2023

In the ongoing saga of Microsoft's $69 billion takeover bid for Activision Blizzard, London's Competition Appeal Tribunal (CAT) temporarily halted the tech giant's appeal against the U.K. competition regulator's block on the deal.

The two-month pause, confirmed on Monday, will allow the involved parties – Microsoft, Activision, and the British Competition and Markets Authority (CMA) – more time to agree on a resolution to the dispute.

All three parties previously requested a two-month stay of the case after the CMA expressed its willingness to consider a modified deal proposed by Microsoft. The tribunal agreed to adjourn the full hearing of Microsoft's appeal, originally scheduled to commence on July 28.

“While we ultimately disagree with the CMA's concerns, we are considering how the transaction might be modified to address those concerns in a way that is acceptable to the CMA,” Microsoft Vice Chair Brad Smith noted last week.

Commenting on the case, Judge Marcus Smith said that he would be open to adjourning the hearing if the CMA presented a valid explanation for the material change in circumstances or a special reason justifying the adjournment application.

Separate reports suggested Microsoft offered to make a "small and discrete" divestiture to ensure its proposed acquisition of Activision Blizzard gets regulatory approval in the U.K.

In April, the CMA made headlines when it became the first major regulator worldwide to block the acquisition, citing concerns over potential competition issues in the cloud gaming sector.

The U.S. Federal Trade Commission (FTC) also opposed the merger but suffered a significant setback when a federal court denied its request for a temporary halt to the deal.

However, last week, shortly after a U.S. federal court greenlit the acquisition, the CMA expressed its willingness to reconsider a modified proposal, suggesting that a restructured deal could address its concerns, subject to a new investigation.

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