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Microsoft Appeal Against UK Block of Activision Blizzard Deal to Start July 24

Microsoft Appeal Against UK Block of Activision Blizzard Deal to Start July 24 - News

by William D'Angelo , posted on 01 June 2023 / 3,009 Views

Microsoft last week filed its appeal to overturn the decision by the UK regulator, Competition and Markets Authority (CMA), to block Microsoft's $67.8 billion acquisition of Activision Blizzard.

A case management conference attended by Microsoft and the CMA was held on Tuesday and Justice Marcus Smith scheduled the hearings for Microsoft's appeal to start July 24 and is expected to last upwards of 10 days. 

Microsoft originally wanted the hearings to be four days and start the week of July 17, while the CMA wanted the hearings to be delayed until the fall.

"The hearing of the substance of this application will take place in the fortnight commencing July 24, so the weeks commencing the 24th and 31st of July," said Smith (via a transcription by VideoGamesChronicle).

"I’m not expecting it to take the whole of those 10 days but I would like the parties to err on the side of longer rather than shorter oral submissions. It seems to me that that is an excess that we can afford.

"There is a tendency—and it’s very much driven by the Tribunal rather than the parties—to cut submissions to shorter than they perhaps ought to be. I want to do the reverse in this case. I want to have the parties understand that we will want to give them every opportunity to unpack the difficulties of this case in oral submissions and for us to have the time to do that."

The hearings will be heard by the Competition Appeal Tribunal (CAT) in the UK.

Microsoft’s acquisition of Activision Blizzard has now been approved in South KoreaChina, the European UnionUkraineSouth AfricaJapanChileBrazilSaudi Arabia, and Serbia

A life-long and avid gamer, William D'Angelo was first introduced to VGChartz in 2007. After years of supporting the site, he was brought on in 2010 as a junior analyst, working his way up to lead analyst in 2012 and taking over the hardware estimates in 2017. He has expanded his involvement in the gaming community by producing content on his own YouTube channel and Twitch channel. You can contact the author on Twitter @TrunksWD.

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EpicRandy (on 31 May 2023)

CMA was awfully prepared at yesterday's hearing while MS's lawyer was keeping them in check for the whole proceeding.
The judge even questioned their definition of the cloud market.
If this sets the tone for the actual court case the MS uphill battle maybe not be as steep as previously foreseen.

  • +7
Imaginedvl EpicRandy (on 31 May 2023)

The best part was at the start when they said that they did know Microsoft would appeal... LOL Which is why they did not have time to prepare.

  • +5
EpicRandy Imaginedvl (on 31 May 2023)

Yep, that was pathetic, I mean MS announced literally moments after the decision they were gonna appeal. So they basically had the same time MS had to prepare + a few extra days.

  • +3
Curbstomp101 EpicRandy (on 31 May 2023)

Yeah but to be fair to the CMA (who are likely going to get their backs blown out in the appeal) smart money says they were banking on the EC blocking and MS walking away

The CMA do not want this fight and wish that MS would abandon the deal, that's why after the EC approved the CMA went on Twitter and started rage tweeting

  • +1
SecondWar Imaginedvl (on 31 May 2023)

Wait, they said they didn't know MS would appeal? Seriously?

  • +3
Imaginedvl SecondWar (on 31 May 2023)

Yap :) They started with that actually as the reason they did not prepare as this was a complete surprise for them and needed time (until October) for this.

  • +4
SecondWar Imaginedvl (on 31 May 2023)

Ok, don't know if that just a bit of shady lawyer bullshitting but even if it is that's a bad look.

  • +3
enurtsol Imaginedvl (on 01 June 2023)

Even if it's true that they didn't expect an appeal, the fact that they made a very important ruling should had meant they already had all their ducks in order BEFORE making such an important decision.

It would be very unprofessional to be making such an important ruling and not have all these information, data, facts, and understanding that led to such decision.

In other words, they should had already been prepared in the defense of their ruling at the moment they made that decision public. Can't be making that ruling without the prepared support to back it up.

  • 0
Pemalite SecondWar (on 31 May 2023)

There is almost $80 billion on the chopping block... And a cost of $3 billion to Microsoft if the merger fails... And probably billions more in share prices.

Of course they were going to appeal.

They should have started preparing for that outcome even before the announcement.

  • 0
Curbstomp101 Imaginedvl (on 31 May 2023)

Now I'm going to put a caveat here, do you remember what happened when the EU approved? The CMA got on Twitter and started rage tweeting...despite no one asking them for a comment or even mentioning them, the CMA still cried about the EU approval

Why? Because the CMA do not want this fight, they know they have little change of winning especially with the Judge being Marcus Smith (who's the head of the entire CAT)

What the CMA wanted was for the EC to block, because in that scenario MS would have likely have walked away

So it is likely the CMA hoped that the EC would have blocked and MS would have given up but now the opposite happened, so its been about 2 weeks since the EC approved the deal could be that maybe the CMA did believe that MS wouldn't appeal but only if the EC blocked the deal

  • +1
Ljink96 (on 31 May 2023)

Let me know if I'm wrong but I heard that Microsoft could go on with the deal without the CMA and by extension the UK in general. But they would need to restructure a part of their business to act separately of the effect of the deal? Or maybe even stop business in the UK entirely if it came down to it?

  • +2
Imaginedvl Ljink96 (on 31 May 2023)

They have options yes but this would be really complicated (without getting out of the UK completely). So this is very unlikely.

  • +3
SecondWar Ljink96 (on 31 May 2023)

They would essentially have to spin-off the UK operations of both business and ensure the UK bits of MS and ABK operated separately. But given the global nature of both how exactly do you ensure, for instance, a UK release of CoD, developed primarily in the US, isn't ultimately controlled by MS anyway?
There's probably a way but it gets very messy.

  • +1
Imaginedvl SecondWar (on 31 May 2023)

Yah this is def. not something that I see happening if they lose the appeal. But he was asking for possibilities :) I agree that this is very unlikely.

  • +2
EpicRandy Ljink96 (on 31 May 2023)

The CMA decision is limited to their jurisdiction, but it's unthinkable for MS to leave the UK and it would be too difficult to split ABK UK also in a way that would be satisfying to the CMA.

Also, I discussed the possibility with others that MS simply take decisive action to make CMA issue non-standing, which would allow MS to close the deal. Something like MS shutting down Xcloud entirely. But after a bit of research, it seems like the CMA conclusion stands by itself notwithstanding their considerations so it would not be possible, however, many experts have also advanced similar action as possible so maybe I'm missing something and it is possible.

  • +1
Curbstomp101 Ljink96 (on 31 May 2023)

There has been conflicting reports on this and how it would work, is it possible? Maybe but I think MS would MUCH rather prefer a clean transaction

It is likely that MS can get the CAT to allow the deal to close everywhere else while they litigate in the UK.

  • 0
Curbstomp101 (on 31 May 2023)

The president of the entire CAT, Judge Marcus Smith was the one overseeing this appeal, it makes sense because this is the biggest case the CMA have ever dealt with.

He was also in charge of the Meta Giphy case where he laid down several guide lines that the CMA ignored here

-Can't look past 5 years in a dynamic market
-CMA did not cross check ie gather evidence to the contrary

MS and ABK lawyers relentlessly pounded the CMA, the CMA simply can't defend their position and will lose the appeal badly

Even Judge Smith, who read the CMA 400 page report twice, was scratching his head at the stupidity of the CMA and their cloud gaming market definition

  • +1
tslog (on 31 May 2023)

Corrupt CMA totally humiliated & discredited themselves in the hearing. At one stage CMA Ask if they hypothetically made a catastrophic error which ruined their case, can they start another case ? Confirming the corruption once again. CMA don’t care about the facts and actually lie about the facts, because the original intent was always the block the deal no matter what, and that is totally corrupt.
Xbox has 12 points of legitimate complaints. Not 1 or 2….12. Corruption by the name & nature CMA.

  • 0
SecondWar tslog (on 31 May 2023)

This reads like Trump Twitter post - 'I say it's corrupt so therefore it is'.

Saying you probably did 5 minutes of reading on the subject and don't actually know what you're talking about is probably closer to reality.

  • +2
SecondWar tslog (on 31 May 2023)

Also, if you're so sure they're corupt and if it's so obvious you must have plenty of concrete evidence. In which case, take that to the relevant authorities - I recommend the UK's SFO.
But you won't because all you have unsubstantiated rants.

  • 0
Curbstomp101 tslog (on 31 May 2023)

Yup, the CMA actually asked if their argument gets blown apart, can they pull another one out of their ass? Thankfully the Judge Marcus Smith told the CMA to go pound sand

  • +1
INCITATUSBR (on 31 May 2023)

in case one regulator blockes it... does it block the whole deal itself?

  • -1
SecondWar INCITATUSBR (on 31 May 2023)

Possibly, but the CMA only has jurisdiction in the UK so it might just block it there. Though not sure if it's feasible to separate the UK operations out given the global nature of the two businesses.

  • +1
tslog (on 31 May 2023)

CMA ignored experts who said that cloud gaming is definitely NOT a seperate market, then totally corruptly lied saying that it was a separate market when they decided to block the deal.
At the hearing yesterday the fully corrupt CMA asked for new experts than the ones already used, because these experts said cloud is not it’s own market.

  • -2
EpicRandy tslog (on 31 May 2023)

CMA ignored experts who said that cloud gaming is definitely NOT a seperate market, then lied saying that it was a separate market when they decided to block the deal.
At the hearing yesterday the CMA asked for new experts than the ones already used, because these experts said cloud is not it’s own market.

See your argument can stand without resorting to calling them corrupt and it actually drives the point better this way as it doesn't let opinions get in the course of the fact you're trying to assert.

  • +4
ClassicGamingWizzz (on 31 May 2023)

Year 2025, we still having daily news about this fucking deal.

  • -9

No it will close this year. No worries.

  • +7

Lol keep waiting 🦴'

  • -10

You are spending way too much time on the internet :) I have no idea what those icons are supposed to mean :) I will wait tho, so they can start bringing those games on GamePass :)

  • +2
  • -11
Qwark Imaginedvl (on 31 May 2023)

It's pretty doubtful it will close this year. Appeals take a while and the CMA isn't an organisation that works quickly and is definitely not in the mood to give MS preferential treatment.

  • -7
Imaginedvl Qwark (on 31 May 2023)

You know that we already have the timeline for the appeal, right?

Everything was set during the call yesterday and it is very unlikely the change. End of July and it will not take more than 10 days. So yah, this year :) (the hearing was yesterday, I watched it live...)

Also, that's not the CMA that is deciding those dates, it is the CAT and the CMA effectively tried to come up with a lot of reasons to push it to October but the judge did not buy them. You are missing some information there :)

Here for all the dates, those are all this summer, not next year.

But you are still right about one thing (without being really right cause that's not what you were talking about), after losing to the appeal, the CMA will have to come up with a new decision and while it will likely be to Microsoft's favor; I'm not so sure about the timing (I believe they have to respect some timeframe and it is not so long tho)

  • +4
EpicRandy Imaginedvl (on 31 May 2023)

There's also not an unsignificant possibility that the CMA simply agrees out of court with MS cutting the appeal proceeding mid-way. And those odds just become more real at yesterday hearing.

  • +2
Imaginedvl EpicRandy (on 31 May 2023)

True there is that possibility too! :)

  • +2
Curbstomp101 EpicRandy (on 31 May 2023)

I think we will have a very good idea after June 12th case management, you'd have to think even the CMA doesn't want to constantly take L after L like the FTC does

  • +1

And I am the one spending way too much time on the internet

  • -3