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“The CMA should not adopt the draft order prohibiting the merger.”
Microsoft has submitted a material changes of circumstances document to the UK’s regulator which stands opposed to its $68.7bn Activision Blizzard acquisition, urging it to drop its block of the deal.
The UK’s Competition and Markets Authority previously ruled that the deal would not be allowed to go ahead back in April, citing concerns on Microsoft’s current, and potentially future, dominance in cloud gaming.
Despite that setback, Microsoft has continued to sign deals with other companies and took on the US Federal Trade Commission in court (and won), leaving the UK’s stance to the deal looking increasingly isolated. And it’s these fresh commitments, Microsoft says, which should now be considered by the CMA. Had the CMA made its original decision with these in mind, Microsoft now says, the CMA would have ruled differently.
Microsoft cited its 10-year agreement with cloud gaming platform Nware, which was signed just days after the CMA’s decision. Microsoft claimed the CMA was unable to “take into account” its deal with Nware, as well as other cloud agreements with Nvidia, Boosteroid, and Ubitus, which it noted were accepted by the EU’s investigation of the acquisition.
Likewise, its new agreement with Sony to keep Call of Duty on PlayStation was also signed in July, after the CMA’s decision, and Microsoft claimed it “ensures that perhaps the most powerful player in the video games industry will have access in the long term to the Activision game it considers most important” for the next 10 years.
These points, along with analysis which has been made available thanks to the FTC’s court case, are proof that the CMA’s decision “undermines” its proposal to acquire Activision Blizzard, Microsoft argues.
Currently, Microsoft and Activision Blizzard have extended their deadline to 18th October, leaving the two companies with just under three months to wrap up the acquisition. Whilst Microsoft has submitted this material changes of circumstances document calling for the CMA to drop its case or reverse its initial decision, it’s also in the midst of submitting a revised proposal to the CMA. The CMA must give its final decision by 29th August, though it has stated it “aims to discharge its duty as soon as possible and in advance of this date”.
