UK appeal tribunal denies CMA's request to postpone Microsoft-Activision trial
Microsoft's appeal against the competition regulator's blocking decision can proceed without delay
Microsoft's appeal against the UK's Competition and Markets Authority's (CMA) decision to block its $69 billion acquisition of Activision Blizzard will proceed as planned at the end of July after the Competition Appeal Tribunal (CAT) denied the antitrust regulator's plea for a delay.
The CMA, which blocked the acquisition in April, had requested the CAT to postpose the hearing from July 28 to October.
The regulator said it needed additional time for preparation and presentation of its case, arguing that it was unable to secure legal counsel with prior experience in this particular matter. The CMA expressed concerns that Microsoft's legal counsel had been engaged in the case for a significantly longer duration, leading to an imbalance between the parties.
However, the tribunal rejected the CMA's application after "carefully" evaluating it.
The CAT said that the CMA had sufficient time to anticipate an appeal, adding that the regulator has "not paid sufficient heed to the true public interest in this case - which is the swift resolution of Microsoft's Notice."
Despite receiving approval from the European Commission, the proposed deal faced opposition from the UK's CMA in April, resulting in the effective blockage of the transaction.
In May, Microsoft filed an appeal against the CMA decision to block its proposed acquisition of Activision Blizzard.
The CMA justified its rejection of the acquisition based on its aim of safeguarding competition in the cloud gaming sector.
According to the agency's initial findings, the purchase of the Call of Duty maker would grant Microsoft excessive dominance in this fast-growing industry.
Rather than opting to regulate the company's cloud gaming business after the acquisition, the CMA determined that preventing the deal altogether was a more straightforward approach.
Defending the deal, Microsoft argued that it has already signed cloud gaming agreements with Ubitus, Boosteroid and Nvidia, enabling Xbox PC games to be playable on these competing cloud gaming services.
The company says it has signed a similar deal with Nintendo to expand the availability of its games on different platforms.
In the United States, the Federal Trade Commission (FTC) is actively opposing the deal and recently obtained a temporary restraining order against it.
A federal court is presently conducting a hearing to determine whether a preliminary injunction should be granted.
The FTC wants the court halt the proposed acquisition, contending that it would grant Microsoft exclusive access to Activision games, including Call of Duty.
On Thursday, the likelihood of the FTC delaying the deal seemed uncertain as a federal judge questioned the agency's claim that the proposed transaction would harm gamers.
Judge Jacqueline Scott Corley in San Francisco challenged the FTC's lawyers to provide supporting data for their arguments and questioned why there was significant concern over "a shooter video game."
"The harm here is we think is substantial in locking up Activision content," said FTC lawyer James Weingarten, according to Reuters.
Following an extended exchange regarding the FTC's rationale, Judge Jacqueline Scott Corley remarked, "All of this is for a shooter video game."
Beth Wilkinson, representing Microsoft, countered that Call of Duty was not indispensable to any specific gaming platform and emphasised that the deal would enable broad licencing of the game.
"More consumers are going to get the game. And that's good for gamers, but it's also good for Microsoft," she said.
In an attempt to address antitrust concerns, Microsoft CEO Satya Nadella said on Wednesday that the company had no motivation to exclude Sony's PlayStation in order to promote the sales of Microsoft Xbox consoles.
"It makes no economic sense and no strategic sense," Nadella said.