LONDON, May 26 (Reuters) – Microsoft (MSFT.O) is challenging Britain’s decision to block its $69 billion acquisition of “Call of Duty” maker Activision Blizzard (ATVI.O) on grounds of “fundamental flaws” in the review of Microsoft’s cloud gaming services.
Britain’s antitrust regulator, the Competition and Markets Authority (CMA), vetoed the deal in April, saying it could hurt competition in the burgeoning cloud gaming market, sparking a furious row.
Microsoft confirmed on Wednesday that it had appealed the ruling to the UK’s Competition Appeal Tribunal (CAT), and a summary of its arguments was published on Friday.
It said the CMA’s conclusion that the deal would lead to a substantial reduction in competition in the cloud gaming market in the UK was incorrect, according to the executive summary.
The CMA “made fundamental errors in calculating and assessing market share data for cloud gaming services by not taking into account the limitations of native gaming (where gamers access games installed on their devices through a digital download or physical disc)”. to the Competition Appeal Tribunal. i
With a total of five grounds for appeal, it also said it would challenge the CMA’s understanding of the cloud gaming market and the impact of the deal.
Rima Alaily, Microsoft Corporate Vice President and Deputy General Counsel, said the CMA’s decision was “flawed for multiple reasons, including the overestimation of cloud streaming’s role in the gaming market and our position in it, as well as an unwillingness to consider solutions. ” that received overwhelming support from the industry and the public”.
“We are confident in the strength of our appeal and the binding commitments we have made to increase competition and choice for players today and in the future.”
Appeals against CMA rulings are heard by the Competition Appeals Tribunal, which decides on the merits of the decision, and it is not an opportunity for Microsoft to file new legal remedies.
EU competition authorities cleared the deal earlier this month after accepting Microsoft’s proposed remedies that were broadly similar to those proposed in the UK.
Microsoft has also appealed the U.S. Federal Trade Commission’s action to block the deal on the grounds that it would stifle competition, according to the agency.
The CMA reiterated its position on Friday, with a spokesperson saying: “We have banned this deal because we were concerned it would reduce innovation and choice in the UK’s cloud gaming market. We will defend our position in court.”
Reporting by Sam Tobin; additional reporting by Paul Sandle, editing by Louise Heavens, Kirsten Donovan