Microsoft and UK Regulators Enter Talks to Resolve Dispute Over Activision Acquisition

The Federal Trade Commission’s request for a preliminary injunction to halt Microsoft’s $68.7 billion acquisition of Activision Blizzard was denied by a US federal judge. However, Microsoft and the United Kingdom’s Competition and Markets Authority (CMA) have decided to pause their legal dispute and engage in negotiations to potentially reach a compromise that would enable the deal to proceed.

“Following today’s court decision in the US, our focus now turns back to the UK. While we ultimately disagree with the CMA’s concerns, we are considering how the deal could be changed to address these concerns in a way that is acceptable to the CMA,” Microsoft president Brad Smith wrote on Twitter “In order to prioritize these proposals, Microsoft and Activision have agreed with the CMA that it would be in the public interest to suspend the proceedings in the UK and the parties have entered into a joint submission to the Competition Tribunal to this effect.”

The CMA said it will block Microsoft’s takeover bid for Activision Blizzard at the end of April. At the time, the regulator argued that the deal would hurt the nascent cloud gaming market by creating a monopoly for Microsoft. It added that if the acquisition goes ahead as planned, Microsoft would have “an incentive to deny [Activision Blizzard] games to competitors and significantly reduce competition in this important growth market.” Microsoft had planned to appeal the decision at a preliminary hearing at the Competition Appeal Tribunal (CAT), the body that hears appeals against CMA decisions, which was held on 28 July. In a statement the regulator shared with The Verge, it said it was “willing to consider any proposal from Microsoft to restructure the transaction in a manner that addresses the concerns raised in our final report.” The CAT has yet to allow both sides to negotiate, but the court is more than likely to rubber stamp the request.