![Microsoft And UK CMA Agree To Pause Legal Battle Over Activision Blizzard Deal](https://images.purexbox.com/ffc7ea35e43fa/microsoft-and-uk-cma-agree-to-pause-legal-battle-over-activision-blizzard-deal.900x.jpg)
Update: The CMA has warned that its latest discussions with Microsoft and Activision Blizzard are at an "early stage", and a restructured deal could ultimately lead to a "new merger investigation". Here's a statement courtesy of The Verge:
"Whilst merging parties don’t have the opportunity to put forward new remedies once a final report has been issued, they can choose to restructure a deal, which can lead to a new merger investigation. Microsoft and Activision have indicated that they are considering how the transaction might be modified, and the CMA is prepared to engage with them on this basis.
These discussions remain at an early stage and the nature and timing of next steps will be determined in due course. While both parties have requested a pause in Microsoft’s appeal to allow these discussions to take place, the CMA decision set out in its final report still stands."
Original story: In the wake of today's FTC court decision, Microsoft and the UK's Competition and Markets Authority (CMA) have both agreed to pause their legal battle over Activision Blizzard. The two parties feel that it is in the public interest to halt court proceedings and allow Xbox to provide fresh proposals over the deal.
Microsoft President Brad Smith has shared a company statement on the move, as the Xbox owner begins "considering how the transaction might be modified" to make it work for the UK CMA. Here's the full quote from Microsoft:
"After today's court decision in the U.S., our focus now turns back to the UK. While we ultimately disagree with the CMA's concerns, we are considering how the transaction might be modified in order to address those concerns in a way that is acceptable to the CMA.
In order to prioritize work on these proposals, Microsoft and Activision have agreed with the CMA that a stay of litigation in the UK would be in the public interest and the parties have made a joint submission to the Competition Appeal Tribunal to this effect."
Any fresh proposals are yet to be detailed by Xbox or the CMA, and it sounds like the team is still figuring out how to change things in order to win over the UK authority. The CMA does welcome those proposals though, as detailed in a new statement via The Verge:
"[We are] 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."
Xbox's Phil Spencer has also provided a statement on today's verdict that focuses on the positive aspects of this deal, if it goes through. You can check that out in full down below:
Do you think Microsoft will ultimately be successful in the US and UK? Leave your thoughts on these developments down below.
[source theverge.com]
Comments 73
And Activision is imminently Xbox’s now…
All over but the crying now
That was quick 😂
They banked on the FTC and Lina Khans personal political agenda to back them up and it failed miserably.
Never a doubt!
Aaaannnnndddd it's a done deal finally.
Jim Ryan won't make it to 2024 as head of Playstation. Wait and see.
What a surprise! It’s as if little england is powerless to actually stop any merger of this size. If the US and EU approve/fail to stop something the UK follows, that’s it. Now wait for some token meaningless concession for the uk to save face.
Oooo it's going to sting Sony to see Crash and Spyro with Xbox Caps and TShirts on 🤣
So that’s it? CoD is now MS’s and will finally return to Nintendo consoles?
CMA leverage has completely disappeared. This is now done.
Crash will look good in green
The CMA really don't want this to go court...
I think they hoped that the FTC Judge would back their 'findings' and therefore use that to fight, but with this ruling, their case looks even weaker now.
Their argument was based on 'what if's' and hypothetical situations that contradicted the Actions and Words of Microsoft - what if MS decide to pull CoD from PS or prevent others from offering CoD on their Cloud service. In a hypothetical' Cloud only gaming future, would MS owning CoD and making it 'exclusive' give them a 'monopoly'.
However, a judge would want 'evidence' that MS intended to remove CoD in the 'near' future - a decade is a 'lifetime' in electronics and 'long enough' for any Company to 'prepare' for that future to 'compete' and its too unpredictable to be guaranteed. A judge wants 'evidence', facts, proof etc. MS has 'proof' they have no intention of pulling games and committed to bringing CoD to 'more' consumers on 'more' platforms for AT LEAST the next Decade.
The CMA were perhaps hoping the FTC had 'something' to prove to the Judge and therefore could use that as evidence to support their case, but this Judges ruling and 'comments' really hurts the CMA. Especially as other regions have since passed this 'unconditionally' too...
MS was probably hoping it would go to court as a Judge's ruling is quite an 'endorsement' and 'legitimises' this deal. I'm sure some would still argue it was 'bad' for the 'industry' and/or for Consumers, but if a Judge with ALL the 'evidence' presented to them says otherwise, their arguments are somewhat nullified and end up looking like ignorant fanboys...
I was 'confident' from the start that the Deal would go through - even if it had to go to court because MS buying ABK doesn't 'hurt' the Competition - it makes it more 'Competitive' in every sector. It would make Xbox 'compete' more with PS/Ninty, Publishing gets more Competitive, Games are still coming, so will 'compete' for gamers, for consumers - now on more platforms...
I wonder what the "deal" will be, MS is hurling CoD at every platform, free licence for cloud services have all ready been offered.
Great news! now wondering when the games will arrive on Game Pass
What will "satisfy" the CMA? I don't expect Microsoft to make significant changes for the Sony-friendly CMA after winning all over the world.
The CMA folding like a red hot Mars Bar. Oh, the fanboys are going to go into full meltdown mode this week. I can't wait for all the salt.
Take that, ya bunch of yellow bellies!
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Finally! This can finally be over with!!!
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Sounds like a win-win for everyone. The UK will get further concessions from Microsoft, and the deal will be approved.
@Banjo- Completely agree. Microsoft have provided sufficient remedies already for certain regulators to get the deal approved and I think the political pressure, and the fact that the CMA are now alone on an island, I can't see Microsoft making any further significant concessions.
@Solidchief hopefully soon even the new diablo especially now the price of gamepass has gone up
@LoquaciousB Right. CMA's concerns were about cloud gaming but their Google witness basically said that CMA was wrong. Microsoft offered Call of Duty to all consoles and cloud platforms for years. What more could they offer when Sony is ahead of them and not only keep their games exclusive but pay third-party to keep games off Xbox, as the intelligent judge realised quickly?
Worst case scenario, ABK games wouldn't be available on Game Pass in UK but since Game Pass is digital, you can change your country region and still play them. I'm curious about what Microsoft is willing to give up for the CMA to be satisfied. What more can Microsoft do for the CMA to not be "worried" about a cloud cataclysm?
@Banjo- The thing about the CMA decision is that they were so far through their process, they didn't stop and re-evaluate all cloud deals MS made in the meantime. They should've done that and amended their decision to take account of it. I think they were overzealous as they wanted to be the first "big" regulator to get their decision out, like they'd get some kudos for it or something. They really thought they were going to be the first domino to make the rest fall. Now they just look like complete idiots, although I'd argue that's how they've looked all along.
Can’t wait for StarCraft on console
@Banjo- I think the "concessions" will just be the exact same deal that MS agreed to with the EU. I don't see Microsoft giving them anything significant ad in all honesty it's the reputation of the CMA that's looking to save face here and needs MS to throw them a bone.
What I'm actually curious about is whether that 10 year deal is still available for Sony or if it's gone now. Sony needs to decide if they want to share all their fantastic engineering (I still think they slapped that thing together last minute to boost it's power) with Xbox for the next CoD. It's no longer Xbox holding CoD from playstation, it's going to be playstation refusing it or bending the knee and sending them dev kits over.
Oh Snake_V5...... is THIS your saviour??? 😂😂😂
@Kaloudz they are folding like a cheap tent even faster than i thought. They knew they had no case but was working with a crooked FTC in hopes that would protect Sony and not the consumers. The head lady at the FTC is in legal trouble and the US estimates 88 billion dollar in wrong choices made by the FTC. Only if you are interested. But you can google the FTC and them withholding important info from congress and it ain’t going to end well for them. That isn’t related to the ABK deal of course but they have a long list of bad choices and they are ruling with power to block instead of what’s best for business so to speak. Again they only mentioned protecting Sony in all of this and not what’s best for consumers.
@LoquaciousB I completely agree. The CMA wanted to make headlines all over the world and they seem stubborn and proud. They overreact and react quickly, not just what you said but I remember they reacting right after every single step even if it was not related to them, especially against the EU in a very childish way.
@Dan1283 Yep that as well
@Krzzystuff Sony don't trust anyone because their strategy to grow in the video game industry is to hurt the competition which means that they said that Microsoft would make Call of Duty buggy and worse on the competing platform because that's what they would do if they owned Call of Duty and were forced to release it for Xbox.
The PS5 is a last-minute design. They overclocked the CPU and GPU, introduced aggressive throttling and oversized the shell and the cooling system when they found out that Series X was more powerful than what they had thought. When they found out that the PS5 consoles that had been sold were technically safe, they cut corners and reduced the cooling system so the current models are less protected against high temperatures - but the size is the same.
MS to CMA: "How about we throw 500 Reward Points and a pack of crisps your way. That'll about do it, yeah?"
Like some have said, the only reason for Microsoft to modify the transaction is to finish this before the original deadline and simplify the process. I expect that acquisition modification to be minimal because the CMA has lost all the arguments so far and just stubbornly refuses to admit that they are wrong. However, Microsoft shouldn't have to pay any fines if the deadline is not met and the parties agree and the parties ABK and Microsoft will agree.
@J_Mo_Money MS wanted discovery data on the Sony bonus structure. I thought they wanted to establish an explicit incentive for Jim Ryan's antics.
Still on track now to Close on the 18th July - exactly when they stated all those months ago they expected it to be closed. They can still 'close' on the 18th now as they will no doubt come to some agreement...
So it could very well be a 'Special' Gamescom with 'ABK' joining them officially....
@theduckofdeath i say insanity lol
HAHA go to bed bad boy. NOW
@J_Mo_Money I'd give him a couple months, maybe a few at a push 🤷♂️
CMA Agreement is in place apparently. "Microsoft and CMA have agreed on a small divestiture to address the regulators concerns. Any divestiture would be related to cloud gaming in the UK." CNBC david faber
As soon as the CMA heard that the FTC lost, they just accepted Microsoft closing down the appeal for one reason...
They don't need the appeal to know they've lost. They'll make some golden handcuff deal, where Microsoft are required to commit to having someone look at their business in 2030, but outside of that, the CMA's case is as solid a barrier as wet cardboard in a tsunami.
It's now down to an appeal by the FTC or challenging the deal after it is closed. Both would be nearly impossible especially when you consider that Judge Corley residing over the case was a big win for the FTC, Microsoft wanted a different court in Washington D.C. not California. I doubt the FTC pursues either option.
The deal should officially close on Monday.
@Kaloudz they are definitely about to bend the knee, otherwise Microsoft can just close down the Activision studios in the UK and that would be a bad look.
@Kaloudz “Beyond that, can you all imagine what the 2024 Xbox Gameshow will be like???? 😁”
Quake Reboot time buddy!! Bring it on ID. Great time to be a Xbox owner. Things will be loaded for 2024 and beyond. Plus i got really bad news for people that thinks Xbox is done looking at mergers. CEO of MS said his plan is to double the revenue of Xbox by 2030. They currently make 16.5 Billion a year, so they will more than likely be looking at smaller and mid size buyouts if they are available. Xbox one giving back all the market share they gained with the 360 just might be a blessing in disguise, seems it woke them up and they are on a mission to make money and bring games to lot’s of platforms and there is zero chance of a 2022 drought year ever again. This gives them close to 30 studios I believe.
@HonestHick Truly unreal this stuff is. The CMA took a look at MS's legal team and decided to settle. Now with the utterly unholy profits of ABK flowing into the Xbox division, they should be able to invest considerably more into content for the platform. Hard to think that in ten years Microsoft might very well be the highest revenue grossing gaming company.
@SplooshDmg the CEO wants them to double by 2030, so in 6-7 years they might be the highest if things go to plan. That is wild stuff indeed. The same CMA everyone was bragging about on how they don’t reverse their decisions and this is a done deal in the UK. Now they are bending the knee and want out of this scuffle. The internet sure is a place of disinformation.
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@Microbius No he isn’t! What a ludicrous thing to think, he has increased PlayStations profits, successfully overseen the launch of a new console, and is growing the business. He’ll be staying in his position.
@HonestHick Reaching an agreeable concession to appease their concerns is not the same as backing down and reversing their decision?
That’s a British way of explaining it 😂
Whilst folks are happy to call the regulators stupid, lying, incompetent, making things up, having weak arguments. None of you are in their commissions, and the EU, FTC and CMA ALL had concerns over Microsoft creating a monopoly in Cloud Gaming! The EU came up with a concession to appease their concerns, the FTC has lost its case, and it looks like the CMA will possibly reach a concession they agree on soon too.
So I would be confident as THREE separate main regulators ALL had the same concerns, that they were pretty valid in those concerns and the evidence they have will be too.
As long as it doesn't involve promising any consessions to Sony. Sony needs to be punished for what they tried to pull
@Nickhyazaki What Sony does, to pay third parties to hurt the competition, Xbox exclusion contracts, etc. is completely illegal in other businesses and EU and other organisations are investigating Sony's anti-competitive practices after part of their dirty laundry has been exposed, so we will hear something about that in a few years, like when Sony and Nintendo were forced to change their policies for EU and UK customers because they were illegal.
@S1ayeR74 sure seems like they bet on the wrong horse in the FTC, now they stand alone, they don’t seem to want much of that. I knew when they asked for an October hearing that they realized they had no case. They were never confident, hence the bad numbers and misinformation. They were hoping the FTC would mess up the deal and they could just stall. FTC and CMA looked really bad and have some answers to explain to the people above them. I might even try and follow that case with Khan. Her goose is cooked.
Article has been updated with a new statement from the CMA.
Both the previous statement and the last one from the CMA stink of immaturity, stubbornness and animosity towards Microsoft. Microsoft should challenge them legally because it seems that what the CMA really wants is to let the situation drag on. If Microsoft and ABK sued the CMA, they would give up immediately because they know that they aren't right. I've never seen a public organisation displaying this level of stupidity publicly until now.
For many a comment on this subject I have been saying that once the FTC case failed (and I never had a doubt that it would) that the CMA would find a way to wriggle out of their blockage. That process has now begun. Much wriggling on the part of the CMA as they attempt to appear competent. Microsoft will do something small; a token gesture that will enable the CMA to save face, but truthfully, they aligned themselves with the wrong side (Sony and the FTC), and made themselves look foolish in the process. Regardless, they will now back down and allow the deal to progress to completion...
This ruling on the FTC essentially sealed the CMA's fate. They're doomed, no doubt they are going to lose embarrassingly if they don't rethink this.
I seriously love that the CMA is trying to save face here. They played a stupid game, and won a stupid prize.
@Kaloudz Nope, they are defending their position whilst back tracking and taking no blame. Like a good true Brit lol. But if it’s their process to re-investigate that will delay the deal beyond this months deadline for the UK at least.
@HonestHick Well when you are a lawyer in a regulatory commission we will take what you say seriously lol. CMA has a point, as did the FTC and the EU. ALL had the same monopoly concerns, they have just resolved them in different ways. Hopefully they can find a way to move forward that suits both parties.
Others are reporting the FTC is leaning towards appealing and now the CMA is suggesting the whole process could restart.
I was hoping this was about done.
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I just don’t understand the argument about Cloud in the future being a concern.
The argument is that big tech like Amazon, Apple, Meta, Google and yes Microsoft could compete; which leaves Sony in the dust. But the ABK acquisition only means that A, B and K are all along for the ride with Microsoft. If the CMA successfully blocked the acquisition then… whats the difference? Sony still gets obliterated; and ABK get scooped up by one of the others.
If the concern is Microsoft having a head start in Cloud… how is that a problem. Someone has to go first.
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@K1LLEGAL Even in this hypothetical "cloud-only" future, it will be just like how it is today with video streaming:
Square Enix will have its own service for its games
EA will have its own service for its games
Ubisoft will have its own service for its games
Sony will have its own service for its games
Nintendo will have its own service for its games.
I am sure all of those companies will have to have a backend supported by Amazon, Google, or, yes, even Microsoft: but that's an entirely different argument all together that has no bearing on video game developers and IP.
The CMA's hard stance on this is just baffling to me. It just seems
1) completely speculative
2) based on lack of knowledge
3) biased
I think the judge in the FTC case summed it up well (copied from Eurogamer):
"Before the merger, there is no access to Activision's content on cloud-streaming services. After the merger, several of Microsoft's cloud-streaming competitors will - for the first time - have access to this content. The merger will enhance, not lessen, competition in the cloud-streaming market."
@S1ayeR74 i don’t need a degree in law to watch a court case and see them stumble to MS lawyers. The FTC asked will you remove COD from PS in about 37 different ways until the judge got tired of it. The CMA not able to even present proper math and the right user base numbers. Their only plan was to stall the deal and make it go past the deadline. The judges saw this and said no and speed the case up and they folded like a cheap tent.Granted i watch the case and didn’t understand some of it as i am not a law degree expert or claim to be. But when a judge says she ain’t here to protect Sony but instead consumers. You know thats a nice way of saying there is no case being made.
@Kaloudz FTC has been crooked under Khan and they have gotten massive amounts wrong in multiple dealings. This one happen to have lawyers that just weren’t having it and MS knew they had the upper hand and didn’t bend.
@Kaloudz me and you will be playing Quake before the FTC and CMA win a deal against ABK. It ain’t happening. The CMA is bending the knee now. 40 countries approved. It’s in the bank. The deal might even close by next Monday.
@Kaloudz Fingers crossed they amend the deal for the UK and the CMA investigates for a couple of weeks then approves it. As they will only need to investigate the amendment. Hopefully.
@Moonglow No, completely wrong. You are clueless if you really think these regulators do nothing and just 'investigate' to show they need to exist.
And I am happy to be a UK consumer thanks. I get tons of protection as such. I'm more than happy to have consumer laws and 12 month warranties, and the ability for legal action to be taken against companies who abuse the law and consumer rights, oh and I like the free government service I can turn to for consumer advice too.
Plus you have no idea what so ever what concessions will be made it how it affects the UK consumer. Total fallacy by you.
Xbox should just close over the CMA, This is nothing but a stall tactic. Screw the CMA.
By the CMA not approving this merger in a timely matter they are only hurting their citizens from getting Activision games on Gamepass. They are protecting a company who doesn't need protection, Sony. I hope they resolve this quickly
@Moonglow You are ignoring so much, firstly I am not damage controlling by pointing out why being a UK consumer is a good thing.
Secondly, the EU would have happily blocked this merger on the exact same grounds of a monopoly in the cloud space being created by it, they came up with the concession to this which MS accepted and even expanded on. So please don’t shine the EU as some night and FTC and CMA as dragons. All three of MS major markets had the same concerns. So it would be utterly ridiculous for me to claim the CMA was right, as all 3 of them had the same concerns.
The CMA already stated they cannot work the concession the EU came up with due to their make up.
As for the CMA proving its relevance? It’s required by law, and is made up mostly of the same staff who did the same positions when we were in the EU. They don’t need to prove anything. You are just angry they blocked the deal, fine. But think about why Microsoft did not amend the deal before to appease the CMA? Did they run out of time or try their luck…. Also let’s not forget the regulators have had access to millions of documents, and hours of presentations from those against the deals, plus industry experts who they DO use. This will have been going on longer then 4 weeks!
The FTC did state it has concerns with cloud gaming in its court case, up yes it did seem to concentrate on COD for some reason.
I am not anti this merger, why would I be I just got 3 years of Game Pass. I do not like monopolies though, if it was one regulator I would be as upset, but all three have said the same thing. And this is Microsoft who are not shy of monopolies, so whilst you may think it’s bad for you personally, if they are allowed to do as they please as the deal they had without concessions their was a good chance it would end up behind band for everyone and the market later on.
But hey, MS and the CMA have agreed to look into amending the deal for the UK, good that’s what we want as then it can be passed and approved as the cloud was the only issue they had really, even if thru have to investigate it all again, but I can’t see it taking long as it’s the second time.
The FTC who knows, in Europe they can make concession, the FTC has a whole other system it seems and isn’t interested in those by the looks of it. You should be diverting your anger at them as they can block the entire deal for the world, the CMA can’t so unless you live in the UK they aren’t affecting you.
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