Microsoft has presented its appeal arguments against the CMA's decision to block its acquisition of Activision Blizzard, accusing the UK's regulator of "fundamental errors."
Microsoft has followed through on its promise and submitted an appeal against the CMA's decision to prevent its acquisition of Activision Blizzard.
In April, following an extensive investigation spanning several months, the UK's competition authority blocked Microsoft's proposed acquisition of Activision Blizzard. The CMA expressed concerns regarding the deal's impact on the cloud gaming market, innovation, and player choice.
The regulator's decision was met with mixed reactions, including criticism from various parties. The EU's European Commission, which approved the deal after Microsoft made concessions, for instance, criticized the CMA's stance noting that in certain cases, competition concerns cannot be effectively resolved through divestments alone and that blocking the merger does not guarantee an improved market outcome.
Several UK politicians, including Chancellor Jeremy Hunt, also raised concerns regarding the CMA's ruling. Additionally, Microsoft itself disagreed with the decision to block the deal and announced its intention to file an appeal.
To proceed with the appeal, Microsoft will need to present its case before the UK's Competition Appeal Tribunal (CAT) and a summary of Microsoft's arguments is now available for review.
Microsoft's appeal is built upon five primary grounds that challenge the CMA's decision. Firstly, Microsoft asserts that the CMA committed "fundamental errors" in evaluating its current position in cloud gaming services, as it failed to consider the limitations posed by native gaming (the practice where users play a game on their device through a digital download or physical disc).
In addition, Microsoft argues that the CMA made a mistake by not adequately considering long-term commercial agreements it had established with cloud gaming providers, referring to deals with NVIDIA, Ubitus, and Boosteroid. The company also claims that the CMA's conclusion that Activision would have independently made its games available on cloud gaming services without the merger was both "irrational" and reached through an "unfair" procedure.
Additionally, Microsoft argues that the CMA's findings, which suggest that Microsoft would possess the capability and motivation to negatively impact rival cloud gaming services by withholding access to Activision's games after the acquisition, are "unlawful".
Finally, the tech giant asserts that the UK's regulator "erred in law by proceeding on the basis that it had a duty to impose what it described as a comprehensive remedy," disregarding "the interests of comity", rejecting Microsoft's cloud remedies, and violating both Microsoft's "common law duty of fairness and the CMA's own remedies guidance."
The appeal process against the CMA's decision is expected to take a considerable amount of time – typically, the processing time for an appeal at the CAT spans up to nine months. However, even if the appeal is successful, it will still require a review by the CMA.
You can find the summary of Microsoft's arguments here. Also, don't forget to join our 80 Level Talent platform and our Telegram channel, follow us on Instagram and Twitter, where we share breakdowns, the latest news, awesome artworks, and more.