A Pause in Appeals: Microsoft Halts Efforts in the U.K. to Negotiate with CMA

Today, a California judge rejected the U.S. Federal Trade Commission’s request for a preliminary injunction in the case against Microsoft and Xbox’s acquisition of Activision Blizzard. Shortly after the ruling, Microsoft made an announcement that it will momentarily pause its appeal efforts against the Competition and Markets Authority (CMA) in the U.K. This pause is intended to create an opportunity for Microsoft and the CMA to engage in negotiations.

U.K. Regulatory Block

Earlier in April, the U.K. regulatory body blocked Microsoft’s acquisition of Activision Blizzard due to concerns about cloud gaming. With a looming July 18 deadline for the acquisition, Microsoft faces the need to either exclude the U.K. from the purchase or reach a satisfactory agreement with the CMA to address their concerns. Microsoft was initially scheduled to challenge the CMA’s block in court on July 28. However, according to Brad Smith, Microsoft’s vice chair and president, that appeal will not proceed as planned. Instead, both parties intend to explore a mutually acceptable deal to address the CMA’s concerns.

“After today’s court decision in the U.S., our focus now turns back to the U.K. While we ultimately disagree with the CMA’s concerns, we are considering how the transaction might be modified in order to address those concerns in a way that is acceptable to the CMA. In order to prioritize work on these proposals, Microsoft and Activision have agreed with the CMA that a stay of the litigation in the UK would be in the public interest and the parties have made a joint submission to the Competition Appeal Tribunal to this effect.”

It’s worth noting that the Competition Appeal Tribunal will still need to review and approve this request, as reported by The Verge. However, it is highly likely that the request will be granted. The CMA also expressed its willingness to consider any proposals from Microsoft that would restructure the transaction to address the concerns outlined in their Final Report, particularly regarding cloud gaming, which remains a point of disagreement between the two entities.

Game Informer has reached out to the CMA for a statement regarding Brad Smith’s announcement. If a comment or statement is received, the story will be updated accordingly.

What are your thoughts on the implications of this development for Microsoft’s acquisition of Activision Blizzard? Share your insights in the comments below!