Microsoft’s Activision Blizzard heads for summer showdown with regulators

Microsoft’s appeal of the UK Competition and Markets Authority’s (CMA) decision to block its proposed Activision Blizzard acquisition will come up for hearing in the week of July 24. The appeal prepares Microsoft for two summer battles with regulators: one against the CMA and the other against the US Federal Trade Commission (FTC), which begins with an evidentiary hearing on August 2.

Microsoft is focusing primarily on the CMA’s decision to block the $68.7 billion deal due to cloud gaming concerns. The CMA estimated that Microsoft controls approximately 60 to 70 percent of global cloud gaming services, and determined that adding to the control call of Dutwhy, overwatchAnd world of Warcraft Cloud gaming will give Microsoft a dangerous advantage in the market.

in a skeleton argument filed with the Competition Appeal Tribunal todayMicrosoft argues that the CMA analysis makes “fundamental errors,” and it wants to rely on four expert witnesses to push for judicial review. Microsoft claims that the CMA failed to consider the ability to switch between cloud gaming and native gaming and says that it has not correctly defined the cloud gaming market. Microsoft does not offer Xbox cloud gaming as a standalone product, for example Fortnite Being the only game you can stream without an Xbox Game Pass Ultimate subscription.

The distinction between the standalone cloud gaming market and the add-on service looks like it will form part of the main argument between Microsoft and the CMA during the appeals process. Microsoft views cloud gaming as a premium add-on to its Xbox subscription for now, while the CMA states, “Microsoft has a strong position in cloud gaming services and the evidence available to the CMA suggests that Microsoft will find it commercially profitable to make it commercially profitable. Games exclusive to its own cloud gaming service.”

In total, Microsoft has identified five grounds of appeal, one of which alleges that the CMA failed to properly consider the various cloud gaming agreements it had entered into with competitors in the weeks leading up to the CMA’s decision. Used to be. The CMA also found that regardless of Microsoft’s proposed acquisition, Activision would be likely to make its gaming content available on cloud gaming services, a belief that Microsoft called “irrational”. Microsoft also alleged that the CMA made four errors in its findings relating to the Xbox maker blocking access to Activision gaming content from rival cloud gaming services.

Microsoft had been pushing for a four-day hearing in the week starting July 17, but during an initial case management conference today, Justice Marcus Smith penciled in a six-day process for the appeal to be held over two weeks, July 24 and July 31. . Total. The CMA was trying to cut short the hearing by arguing that it needed time to prepare a defense of its decision. It is possible that the hearing date could still be pushed back, but Justice Smith strongly indicated this would be unlikely.

With Microsoft’s appeals process set to begin in the UK in the summer months, the focus will turn even closer to home. The FTC sued Microsoft last year to block Activision’s purchase of Blizzard, and that investigation is still ongoing. a proof hearing is scheduled For August 2, just a week after Microsoft’s appeal hearing begins in the UK.

The FTC case may well unearth scarce details on games industry exclusivity deals if Microsoft and Sony’s attorneys already own how many records, internal documentation and emails from the company’s PlayStation unit should be used as evidence. The documentation is then made public.

While UK and US regulators have been at loggerheads with Microsoft, the European Union approved the deal earlier this month. The EU’s antitrust chief Margrethe Vestager even said Microsoft’s acquisition of Activision Blizzard has “significant competitive implications” in a speech last week discussing the CMA’s decision to block the deal. Vestager ended his speech by discussing the future of merger control and changes in consumer habits, disruption and consolidation across sectors.

“Our mission is to support that transition, one merger at a time,” Vestager said, “It’s about finding solutions that keep the game fair for all players, and working together with sister agencies as we do this. It’s our call of duty.”