Microsoft and the UK’s antitrust regulator have been granted a two-month extension to temporarily halt their legal battle as they seek to address the Competition and Markets Authority’s (CMA) concerns regarding Microsoft’s proposed $68.7 billion acquisition of Activision Blizzard. Judge Marcus Smith of the Competition Appeal Tribunal (CAT), responsible for reviewing CMA decisions, has requested evidence from the watchdog justifying the adjournment and outlining any new consultation processes. The legal battle has been paused while awaiting these submissions.
Microsoft appealed the CMA’s decision in April to block the merger, citing concerns about cloud gaming. The CAT was scheduled to hear the case starting on July 28th. However, following the recent unsuccessful attempt by the Federal Trade Commission (FTC) to delay the acquisition in the US, the CMA expressed its willingness to consider a modified merger agreement from Microsoft. Consequently, all parties involved requested additional time, which has been granted by the CAT.
During the hearing, CMA lawyer David Bailey emphasized that the FTC’s court loss did not influence the CMA’s decision to review a new proposal from Microsoft. He stated that both Microsoft and the CMA were confident that a restructured transaction could address the concerns raised by the CMA.
It was revealed in the hearing that Microsoft has not yet submitted an amended proposal to the CMA, despite the merger deadline being tomorrow, July 18th. Resolving the issues by this deadline appears unlikely. In such a case, Microsoft and Activision will need to agree on an extension or renegotiate the terms of their agreement. Alternatively, Activision could walk away from the deal with a $3 billion breakup payment from Microsoft.
Reports suggest that Microsoft may sell certain cloud gaming rights in the UK to satisfy the CMA’s concerns. Microsoft has already signed agreements with third-party cloud gaming companies to offer its games on their platforms, which was sufficient for approval from the European Union.
Meanwhile, the FTC is scheduled to hold its own evidentiary hearing regarding the acquisition starting on August 2nd. The FTC had sued to block the merger and sought a preliminary injunction to halt the deal until a trial could take place, but its attempts were unsuccessful.
Given these circumstances, both Microsoft and Activision are eager to finalize the merger by early August. While there were initial suggestions of closing the deal by the original deadline and finding a workaround to continue operations in the UK, all parties now seem committed to reaching a mutually agreeable resolution. The CMA has granted itself an additional six weeks, until August 29th, to make a final decision on the case.
Frequently Asked Questions (FAQs) about merger concerns
What is the reason for the legal battle between Microsoft and the UK regulator regarding the Activision merger?
The legal battle between Microsoft and the UK regulator, the Competition and Markets Authority (CMA), is due to the CMA’s concerns over Microsoft’s proposed acquisition of Activision Blizzard for $68.7 billion. The CMA blocked the merger in April, citing cloud gaming concerns.
Why has the legal battle been temporarily paused?
The legal battle has been temporarily paused due to a two-month extension granted to Microsoft and the CMA. This pause allows both parties time to address the concerns raised by the CMA and seek a resolution. Judge Marcus Smith of the Competition Appeal Tribunal (CAT) has requested evidence from the CMA justifying the adjournment and outlining any new consultation processes.
What happens if the concerns are not resolved by the deadline?
If the concerns raised by the CMA are not resolved by the merger deadline, Microsoft and Activision will need to agree on an extension of their current agreement or renegotiate the terms. Alternatively, Activision could choose to walk away from the deal and receive a $3 billion breakup payment from Microsoft.
What measures is Microsoft considering to address the CMA’s concerns?
Reports suggest that Microsoft may sell certain cloud gaming rights in the UK to satisfy the CMA’s concerns. Microsoft has already signed agreements with third-party cloud gaming companies to offer its games on their platforms, which has gained approval from the European Union. This move aims to address the competition concerns raised by the CMA.
What are the timelines for further hearings and decisions related to the merger?
The FTC is scheduled to hold its own evidentiary hearing regarding the merger starting on August 2nd. The FTC had sued to block the merger but was unsuccessful in obtaining a preliminary injunction. The CMA has given itself an additional six weeks, until August 29th, to make a final decision on the case, following the two-month extension granted by the CAT.
More about merger concerns
- Microsoft granted pause in legal battle over Activision merger
- UK regulator grants extension in Microsoft-Activision merger case
- Competition Appeal Tribunal (CAT)
- Competition and Markets Authority (CMA)
- Federal Trade Commission (FTC)
3 comments
omg dis legal battle is cray! Microsoft n UK reg’r got extension, gotta resolv dat Activision merger. Waitin’ 4 evidnce. Hope dey fix it!
So Microsoft tryna buy Activision but CMA said no. Now dey pause da fight cuz they wanna figure it out. Will dey make a deal? Excitin’ stuff!
Microsoft and UK regulator in a legal tussle ova Activision merger. CMA blockin’ da deal. But now, dey got some time to sort it out. Let’s see what happens next!