Microsoft has sent its final submission to the U.K.’s Competition and Markets Authority (CMA), outlining why it believes the organisation should reconsider its block on the proposed $69 billion buyout of Activision Blizzard.
In April, the CMA announced its “Final Report” on the acquisition, citing competition concerns around cloud gaming in the UK.
Since then, Microsoft has defeated the U.S.’s Federal Trade Commission (FTC) in court, obtained approval from key regulator the European Commission, and secured an agreement with console rival Sony for the provision of Activision games on PlayStation for a decade.
Microsoft’s submission raises all three developments in its attempt to convince the CMA to reconsider, and mentions plans to put forward a proposal for a modified merger situation (MRS) “which would mean that the current approach in the FR and a potential final order would be superseded”. Microsoft and the CMA are currently negotiating these unannounced proposals, reported to involve a divestiture that could relate to a licensing deal for the cloud.
The CMA is the last obstacle Microsoft must navigate in order to get the deal signed. The CMA originally said no to the deal, but the Competition Appeal Tribunal (CAT) paused Microsoft's appeal against the decision to allow it and the CMA to negotiate a new proposal.
Microsoft and Activision Blizzard then postponed their merger deadline for three months to allow more time for the deal to gain approval from the CMA. Microsoft must therefore complete its acquisition of Activision Blizzard by October 18 or pay several billion dollars in a reverse termination fee.
“Submissions under section 41(3) of the Act regarding material change of circumstance or special reasons are very rare,” the CMA said in a note published today, July 31. “It is not a usual part of the CMA’s process during a remedies implementation period to consult on submissions received in response to a consultation on a proposed undertaking or order. However, in light of the guidance provided by the Competition Appeal Tribunal on this specific case, the Inquiry Group has decided it is appropriate to do so in this case.”
The CMA warned earlier in July that Microsoft could be hit with a whole new merger investigation when it submits its new proposal, but the company is seemingly confident the deal will finally go through by October 18. The $68.7 billion deal was announced in January 2022, meaning it's so far taken 18 months to go through.
The CMA has now invited anyone wishing to comment on Microsoft’s submission to get in touch. These comments should be sent by August 4. The CMA will make its final (final!) decision on August 29.
Wesley is the UK News Editor for IGN. Find him on Twitter at @wyp100. You can reach Wesley at wesley_yinpoole@ign.com or confidentially at wyp100@proton.me.
