CMA And Microsoft Agree To Pause Activision CAT Appeal

The Activision Blizzard merger has recently seen a long battle against the FTC. The FTC previously challenged Microsoft in court to block the deal, but the court has released its verdict, allowing Microsoft to proceed with the deal.

Among the regulators against the merger, the CMA blocked the deal over concerns about the cloud gaming market. Following the court’s decision to allow Microsoft to proceed with the acquisition, the CMA has issued a new statement.

The regulator is ready to consider a new proposal from Microsoft, and both the CMA and Microsoft have made a joint submission to pause Microsoft’s appeal of the CMA’s previous decision.

Why it matters: Following a victory against the FTC, the CMA was the biggest obstacle for Microsoft. However, the regulator is now ready to discuss more proposals, hinting that the deal is all but ready to be completed.

CMA has issued a statement after the US court decision: "We stand ready to consider any proposals from Microsoft to restructure the transaction in a way that would address the concerns set out in our Final Report. …

— Jordan Novet (@jordannovet) July 11, 2023

As reported by journalist Jordan Novet, the CMA is willing to negotiate with Microsoft.

Microsoft and the CMA will now conduct closed-door negotiations to restructure the proposal, addressing the CMA’s concerns in the final report. This indicates that the CMA is ready to follow in the European Commission’s footsteps to approve the deal.

Microsoft President Brad Smith also commented on this situation. While he disagrees with the CMA’s verdict, Microsoft is committed to finding ways to modify the transaction to address the concerns.

Following the CMA’s decision to block the deal, Microsoft offered further remedies to the European Commission. These were enough to convince the regulator, and the gaming giant could offer similar remedies to the CMA.

It should be noted Microsoft has previously considered going ahead with the deal, despite the CMA’s decision. This would entail measure like abandoning the UK market or providing Activision games through a third party.

However, this will likely not be needed anymore.

Previously, Microsoft decided to appeal the CMA’s decision in the CAT, and this process was expected to take a while. However, with negotiations in progress, the deal may be approved earlier than anticipated.