Microsoft outlines grounds for Activision’s appeal against UK regulator via Reuters

© Reuters. FILE PHOTO: The Microsoft logo is seen on a smartphone placed over the Activision Blizzard logo shown in this illustration taken January 18, 2022. REUTERS/Dado Ruvic/Illustration/

Written by Sam Tobin

LONDON (Reuters) – Microsoft is challenging Britain’s decision to block its $69 billion acquisition of Activision Blizzard (NASDAQ:NASDAQ) on the grounds of “fundamental errors” in the valuation of cloud gaming company Microsoft (NASDAQ:). services.

Britain’s antitrust regulator, the Competition and Markets Authority (CMA), opposed the deal in April, saying it could hurt competition in the emerging cloud gaming market, sparking a furious row.

Microsoft confirmed on Wednesday that it had lodged an appeal against the ruling with the UK Competition Appeals Tribunal (CAT), and a summary of its arguments was published on Friday.

It said the CMA’s conclusion that the deal would significantly reduce competition in the UK cloud gaming market was wrong, according to the summary.

The CMA “made material errors in its calculation and assessment of market share data for cloud gaming services by not taking into account the limitations of native games (where players access games installed on their devices through a digital download or physical disc),” Microsoft will say in the Court of Competition Appeals. I

It laid out five grounds for appeal in total, and also said it would challenge the CMA’s understanding of the cloud gaming market and the impact of the deal.

Rima Alili, Microsoft Vice President and Deputy General Counsel, said that the CMA’s decision was “flawed for multiple reasons, including an overestimation of the role of cloud broadcasting in the gaming market and our position in it, as well as its unwillingness to consider solutions that won support.” Industry and overwhelming audience.”

“We are confident in our attractiveness and the binding commitments we have made to increase competition and player selection today and in the future.”

Appeals against the CMA’s rulings are heard by the Competition Appeals Tribunal, which issues a ruling on the merits of the decision, and it’s not an opportunity for Microsoft to make new remedies.

European Union competition authorities approved the deal earlier this month after it accepted remedies offered by Microsoft that were broadly comparable to those proposed in the UK.

Microsoft also challenged a US Federal Trade Commission action seeking to block the deal on the grounds that, the agency said, it would suppress competition.

The CMA reiterated its position on Friday, with a spokesperson saying: “We have blocked this transaction because we have concerns that it will reduce innovation and choice in the UK cloud gaming market. We will defend our position in court.”

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