Microsoft Attacks UK Agency in Clash Over $69 Billion Deal Ban
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2023-05-30 23:16
Microsoft Corp. accused the UK antitrust watchdog of creating uncertainty worldwide for its $69 billion Activision Blizzard Inc.

Microsoft Corp. accused the UK antitrust watchdog of creating uncertainty worldwide for its $69 billion Activision Blizzard Inc. takeover in the first round of its legal battle over the agency’s decision to veto the deal.

The Competition and Markets Authority “is the outlier here in its position and it creates the uncertainty that risks delaying the deal,” Daniel Beard, Microsoft’s lawyer, said at a first administrative hearing at the Competition Appeal Tribunal in London on Tuesday.

“That’s 10 clearances now,” he said, pointing to the most recent blessing from authorities in South Korea — just days after the European Union approved one of the biggest ever tech transactions.

The US software giant also demanded a quick turnaround on its appeal case, asking the court to set a July 17 date for a four-day substantive hearing. Lawyers for Activision, which has applied for permission to intervene, also called for urgency.

The CMA said it wouldn’t be practical or fair to hear the case so soon and urged a late-September or October hearing. There will be “no incremental delay to the transaction” by setting it later, the CMA’s lawyer said at the hearing.

Read More: Microsoft Appeals UK Decision to Block Activision Mega Deal

The EU earlier this month waved one of the biggest deals in history through, diverging from the UK’s shock decision to block. The CMA argued that it would enable Microsoft to set the terms of the gaming market for a decade.

It’s set to be a tough fight for Microsoft as the UK tribunal’s powers are limited to looking at the legality of the decision rather than the substance. The CMA has never overturned a decision on any case that has been sent back for another look by the CAT.

Microsoft is fighting the decision on five separate grounds. Lawyers for the company allege the CMA made “fundamental errors” in its calculation and assessment of market share data for cloud gaming services.

“The CMA’s decision is flawed for multiple reasons, including its overestimation of the role of cloud streaming in the gaming market and our position in it, as well as its unwillingness to consider solutions that received overwhelming industry and public support,” said Rima Alaily, deputy general counsel at Microsoft.

The CMA’s decision “ignores the facts, the law, and all commercial reality,” Activision said in a separate statement. “We’re looking forward to working with Microsoft to get this deeply flawed decision reversed.”

The CMA said it will defend its position in court and prohibited the deal because it had concerns that it would reduce innovation and choice.

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