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Microsoft and UK regulators agree to pause their Activision battle to negotiate

Microsoft and UK regulators agree to pause their Activision battle to negotiate


Microsoft won its fight against the FTC, and now it’s trying to make its big Activision Blizzard acquisition work in the UK.

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Illustration: Alex Castro / The Verge

Microsoft and the UK’s Competition and Markets Authority (CMA) have both agreed to pause their legal battle over the proposed Activision Blizzard acquisition in order to further negotiate. Microsoft has just won a separate ruling with a US federal court against the Federal Trade Commission (FTC), and the CMA is the last regulator preventing the Xbox maker from completing its $68.7 billion Activision Blizzard deal.

The UK regulator moved to block Microsoft’s proposed acquisition in April, and Microsoft was due to appeal that decision with a hearing set to start on July 28th. Microsoft has now agreed with the CMA to pause its appeal process to look at how the transaction could be modified to address the CMA’s cloud gaming concerns.

“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,” says Microsoft president Brad Smith in a statement to The Verge. “In order to prioritize work on these proposals, Microsoft and Activision have agreed with the CMA that a stay of the 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.”

The CMA confirmed the decision in a statement to The Verge, noting that the regulator is “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.”

The Competition Appeal Tribunal (CAT) will need to approve or deny this request, but it’s more than likely that it will be approved to allow both parties to negotiate further. The CMA did try to file and delay Microsoft’s appeal of its Activision Blizzard acquisition decision, with a request right in the middle of the FTC v. Microsoft hearing. The CAT shut that request down, as it would have pushed the appeal process from July to October — “contrary to justice and fairness.”

That’s left the UK regulator more open to discussions with Microsoft over a cloud remedy that would benefit UK consumers. MLex also reported last month that Microsoft was exploring options to close the deal despite the UK block, which could have involved closing over the UK decision and potentially carving out Activision in the UK. That’s a messy process, and it looks like both parties are now willing to negotiate to avoid it.