CMA Publishes Microsoft Arguments As It Denies Bowing To Pressure

The UK Competition and Markets Authority (CMA) has published Microsoft’s arguments for the reonsideration of its proposed $69 billion (£54bn) acquisition of Activision Blizzard, after an appeals court granted an adjournment to the case.

Rejecting claims it had bowed to outside pressure over the deal, which it initially blocked, CMA chief executive Sarah Cardell said in a televised interview that the agency would “consider [Microsoft’s] restructured proposals carefully” but that the proposals would have to “fully and comprehensively resolve our concerns”.

In its submission to the regulator Microsoft argued concessions offered to the European Union shortly after the CMA decision should be taken into account in a new decision, the agency said.

Microsoft told the EU it had entered into 10-year deals with companies including Nvidia, Boosteroid and Ubitus allowing Activision games to be streamed by competitors.

Restructured deal

As part of that arrangement Microsoft said it would establish a monitoring and enforcement regime which the company said should address some of the CMA’s concerns.

The company also argued the CMA’s decision had reached further than necessary to address streaming concerns, such as by covering Blizzard’s King unit, which makes mobile device games, the regulator stated.

Shortly after the US Federal Trade Commission (FTC) suffered a court defeat over its own efforts to block the Microsoft-Activision deal, the CMA said it was prepared to reconsider the case if Microsoft were to restructure it, in an unprecedented move.

The CMA said in its statement late on Friday that the FTC’s court failure was “irrelevant and immaterial” to its own actions.

‘Position has not changed’

Chief executive Cardell told Sky News last week: “We certainly haven’t compromised”.

“We will consider [Microsoft’s} restructured proposals carefully. But anything that they put forward to us will need to fully and comprehensively resolve our concerns. Our position on that hasn’t changed,” she said.

The UK Competition Appeal Tribunal had been considering an appeal by Microsoft to the CMA action, but on Monday provisionally approved an adjournment, which it formally granted on Friday.

Following the adjournment the CMA said it was likely to be able to reach a new provisional view on the restructured deal the week beginning 7 August.

FTC suspends challenge

The FTC said late last week it was suspending its own internal administrative challenge to the deal as it continued to appeal a decision blocking a preliminary injunction that would prevent the acquisition from going ahead.

The agency said it could refile the case, which was originally filed last December and had been scheduled to go before its internal administrative judge on 2 August.