Microsoft, UK regulators granted pause of appeal over Activision deal
Microsoft’s appeal against the UK’s block on its $75 billion takeover of Activision Blizzard has been temporarily paused by a London tribunal. This decision was made in order to provide additional time for the parties involved to attempt to resolve the dispute. Microsoft, Activision, and the Competition and Markets Authority (CMA), which is Britain’s competition regulator, all requested a two-month stay of the case after the CMA expressed its willingness to consider a modified deal proposed by Microsoft. The Competition Appeal Tribunal (CAT) ruled on Monday that the full hearing of Microsoft’s appeal, originally scheduled to begin on July 28, should be adjourned.
In April, the CMA became the first major regulator to block the acquisition of Activision Blizzard due to concerns about its impact on competition in cloud gaming. The Federal Trade Commission (FTC) in the US also opposed the merger. However, the FTC suffered a significant defeat last week when a federal court rejected its application to temporarily halt the deal. Normally, the CMA’s final report marks the end of proceedings, as companies are unable to offer remedies after its publication, leaving their only recourse to be the CAT. Microsoft stated that the pause of the case will allow all parties involved to attempt to find a resolution.
Just last week, shortly after a US federal court cleared the way for the merger, the CMA stated that it would reconsider a modified proposal. Following further review, the CMA announced that a restructured deal could potentially address its concerns, as long as a new investigation is conducted. All parties involved in the case applied for a two-month pause at the CAT, with the CMA’s lawyers stating that it will provide an opportunity for constructive engagement regarding Microsoft’s proposals. David Bailey, a lawyer representing the CMA, emphasized that the FTC’s previous defeat did not influence the CMA’s decision to reconsider a new deal. He expressed confidence that a restructured transaction, if notified by Microsoft, has the potential to address the concerns identified by the CMA. Microsoft’s lawyer, Daniel Beard, highlighted the importance of speed in closing the deal and stated that the UK is the only obstacle remaining.
FAQs:
Q: Why did Microsoft’s appeal against the UK’s block on its takeover of Activision Blizzard get paused?
A: The appeal was paused to allow the parties involved more time to resolve the dispute.
Q: What was the reason for the block on Microsoft’s takeover?
A: The UK’s competition regulator, the CMA, blocked the merger due to concerns about its impact on competition in cloud gaming.
Q: Has any other regulator opposed the merger?
A: Yes, the Federal Trade Commission in the US also opposed the merger but suffered a defeat when their application to temporarily halt the deal was rejected by a federal court.
Q: What will happen now that the appeal has been paused?
A: The parties involved will have the opportunity to engage in discussions and attempt to find a solution.
Q: Could a modified deal satisfy the concerns of the UK’s competition regulator?
A: The CMA has stated that a restructured deal could potentially address its concerns, subject to a new investigation.
Q: Why did the CMA decide to reconsider a modified proposal?
A: The CMA’s decision to reconsider was made after a federal court in the US ruled in favor of the merger.
UK regulators grant Microsoft temporary stay on appeal for Activision deal
Microsoft’s $75 billion takeover of Activision Blizzard, which has been blocked by Britain, had its appeal formally paused by a London tribunal on Monday. This pause was granted to provide more time for the parties involved to resolve their dispute. Microsoft, Activision, and Britain’s competition regulator, the Competition and Markets Authority (CMA), had all requested a two-month stay of the case after the CMA expressed its willingness to consider a modified deal proposed by Microsoft. The Competition Appeal Tribunal (CAT) ruled on Monday that the full hearing of Microsoft’s appeal, originally scheduled for July 28, should be adjourned.
The CMA was the first major regulator to block the acquisition of the popular video game maker “Call of Duty” in April, citing concerns about competition in the cloud gaming industry. The Federal Trade Commission (FTC) also opposed the merger, but suffered a significant defeat last week when a federal court rejected the FTC’s request to temporarily halt the deal. In Britain, the CMA’s final report is typically considered binding, as companies cannot offer remedies after its publication, and their only recourse is to appeal to the CAT. Microsoft argued that pausing the case would allow all parties to work towards finding a solution.
Last week, shortly after a US federal court approved the deal, the CMA stated that it could re-evaluate a modified proposal. It later clarified that a restructured deal could address its concerns, subject to a fresh investigation. All sides involved in the case applied for a two-month pause, with the CMA’s lawyers stating in court filings that it would enable the CMA and the parties to engage in swift and constructive discussions regarding Microsoft’s proposals. David Bailey, a lawyer representing the CMA, emphasized that the FTC’s previous defeat did not influence the CMA’s decision to consider a new deal.
Bailey stated, “Based on the discussions thus far, both Microsoft and the CMA are confident that Microsoft notifying a restructured transaction is capable of addressing the concerns that the CMA has identified.” Daniel Beard, Microsoft’s lawyer, expressed the importance of speed in closing the deal and highlighted the UK as the only remaining obstacle.
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