FILE - Visitors passing an advertisement for the video game 'Call of Duty' at the Gamescom fair for computer games in Cologne, Germany, Aug. 22, 2017. Microsoft has signed an agreement with Sony to keep the “Call of Duty†video game series on PlayStation following the tech giant’s acquisition of the video game maker Activision Blizzard. The announcement was made Sunday, July 16, 2023 in a Twitter post by Phil Spencer, who heads up Microsoft’s Xbox. (AP Photo/Martin Meissner, File)
LONDON (AP) – Microsoft and British regulators won more time from a court Monday as the U.S. tech company uses a rare second chance to overcome opposition to its $69 billion bid for video game maker Activision Blizzard.
Judge Marcus Smith conditionally approved a joint request from Microsoft and the Competition and Markets Authority to delay the appeal that the company set in motion after the CMA initially rejected the deal. The regulator later pushed back its final decision so it can consider Microsoft’s argument that new developments mean its blockbuster purchase of the Call of Duty game maker should go through.
Also on Monday, a group of gamers who’ve described themselves as Activision fans made a last-ditch effort to stop the deal in the U.S., asking the Supreme Court for an emergency order that would block Microsoft from imminently closing the deal before its self-imposed Tuesday deadline.
The deal has already won approval in the European Union and a slew of countries but has faced opposition from antitrust regulators in Britain and the United States.
The U.K. blocked the deal on concerns that it would stifle competition in the small but fast-growing cloud gaming market. It also faced stiff resistance from rival Sony, which makes the PlayStation console that is a rival to Microsoft’s Xbox game system.
But those positions appeared to be softening. Microsoft said Sunday it signed a 10-year agreement with Sony to keep the popular Call of Duty video game series on the PlayStation if the merger goes through.
Activision’s Call of Duty series of games has been a flashpoint in the merger battle fuelled by Sony’s fears it would lose access to the title.
As it tried to win over regulators around the world, Microsoft has been signing provisional agreements to license Activision titles like Call of Duty to Nintendo and some cloud gaming providers. Sony had been holding out until now.
The British watchdog said last week that it’s giving itself six extra weeks to consider Microsoft’s submission outlining new developments and “special reasons” why the deal should be approved.
Smith said his ruling was conditional based on the CMA providing written explanations to address some points he raised. He said it would also help if Microsoft provided a statement “explaning the significance of the Sony transaction.”
The judge acknowledged the need to come up with a speedy decision before Tuesday, which marks an important deadline for the deal. Both Microsoft and Activision had agreed that either party could walk away from the planned merger if it hasn’t closed by then, triggering Microsoft to potentially have to pay a $3 billion breakup fee unless both sides decided to renegotiate.
“It is obviously clear that this is an urgent matter which requires an urgent if conditional outcome,” Smith said.
Both sides had asked the Competition Appeal Tribunal for the delay shortly after a court in the U.S. thwarted the Federal Trade Commission’s efforts to stop the acquisition.
Smith said he wanted to make sure that the FTC’s failure to block the deal played no part in the CMA’s reasoning for requesting a delay to give Microsoft another chance.
The CMA’s attorney, David Bailey, said it was a “coincidence in timing” at least “so far as the CMA is concerned” that the FTC lost its fight to block the deal in the U.S. He said the CMA was squarely focused on the public interest and there’s a realistic chance that a restructured transaction could resolve its concerns.
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AP Technology Writer Matt O’Brien in Providence, Rhode Island contributed to this report.
