UK Made “Fundamental Errors” In Blocking Activision Sale, Microsoft Says In Appeal

Details of Microsoft’s appeal against the UK Competition and Markets Authority’s decision to block its acquisition have been made public. An integral aspect of the UK’s decision to block the acquisition was the CMA’s examination of Microsoft’s position in the cloud video gaming market, and Microsoft has claimed that the CMA made “essential mistakes” in doing so.

Microsoft said that the CMA had failed to adequately consider the limitations of “native video gaming,” or playing a game that is installed on your device, on cloud video gaming services. Microsoft maintains that cloud video gaming should not be considered a separate market because gamers may always switch to native video gaming.

After the CMA’s “incorrect, narrow, market meaning” of cloud video gaming is corrected, Microsoft promises that its “3 long-lasting business contracts” will deliver Activision titles to other cloud services for the next decade.

The European Union relied heavily on these agreements before approving the merger earlier this month. “To us, this option totally resolved our issues,” said Margrethe Vestager of the EU’s pick. Furthermore, it led to “significant procompetitive results.”

In its appeal of the CMA’s decision, Microsoft lays out five separate grounds for appeal, each of which details an error in the CMA’s reasoning. Microsoft has demanded that the CMA cover the costs of appealing and that the decision be overturned “in its entirety” as part of its appeal.

So far, 37 countries have approved the acquisition, with the United Kingdom being the only holdout. The United States has not yet approved the deal. The FTC has filed suit against Microsoft in an effort to block the deal, with a preliminary hearing set for August.

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