Earlier this week, Microsoft announced it had formally filed its appeal to try and overturn the decision by the UK Competition and Markets Authority to block its $69 billion acquisition of Activision Blizzard. Now anyone can read the text of that appeal, and it appears that Microsoft will argue five specific grounds against the CMA’s reasoning to block the deal.
In April, the CMA said it would not allow Microsoft to buy Activision Blizzard because it felt it would give Microsoft too much of a competitive advantage in the cloud gaming market. In its appeal, which is now posted on the CMA’s Competition Appeal Tribunal website, Microsoft says the CMA “made fundamental errors” when the group looked into Microsoft’s cloud gaming efforts.
Microsoft claims the CMA “failed to consider potential switching to native gaming, resulting in a flawed conclusion that cloud gaming services fall in a separate product market.” It also claims the group “made fundamental errors in its calculation and assessment of market share data for cloud gaming services.” The CMA previously claimed Microsoft currently controls as much as 70 percent of the cloud gaming market.
In addition, Microsoft claims the CMA did not take into proper consideration its efforts to make agreements for both its own and Activision Blizzard games to be included in competing cloud gaming services. Also, it said that the CMA’s mention that Activision Blizzard would eventually add games to cloud services on its own “was irrational and arrived at in a procedurally unfair manner.”
The CMA’s reasoning that Microsoft “would have the ability and incentive to foreclose rival cloud gaming services by withholding access to Activision’s gaming content” was also called “unlawful” by the company. Finally, the CMA should not have rejected the remedies that Microsoft offered, claiming its “rejection was in all the circumstances disproportionate.”
The Competition Appeal Tribunal may take several months to consider Microsoft’s appeal. Even if it votes in favor of the company, the UK law says the case goes back to the CMA for yet another review of the acquisition.