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Microsoft appeals UK veto of Activision Blizzard takeover


Microsoft has filed an appeal against the decision by the UK competition watchdog to block its proposed $69 billion acquisition of Activision Blizzard, the creator of Call of Duty.

The US tech company confirmed that it has lodged a formal appeal against the verdict of the Competition and Markets Authority (CMA), which was announced last month.

The case will be presented before the Competition Appeal Tribunal (CAT).

Read More: European Union approves $75 billion Microsoft acquisition of Activision Blizzard

Last month, Activision criticized the CMA's decision, stating it indicated the UK was "clearly closed for business." Microsoft, known for its Xbox gaming console, argued the CMA's move "discourages technology innovation and investment" in the country.

Legal experts have suggested the CMA's decision has dealt a significant blow to the takeover, even though it was approved by the European Union (EU) earlier this month.

Both the CMA and the European Commission focused on the impact of the acquisition on cloud gaming, a technology that enables users to stream video games from remote servers to their devices.

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The CMA concluded the deal would harm competition in the cloud gaming market, a decision also supported by the European Commission.

However, the EU accepted Microsoft's concessions, which involved offering free licenses over a 10-year period to European consumers who purchase Activision PC and console games, allowing them to stream the games on other cloud gaming services.

Activision's popular titles include World of Warcraft, Hearthstone, and Candy Crush.

Read More: Microsoft’s $68.7 billion bid for Activision Blizzard blocked over competition fears

Activision CEO Bobby Kotick praised the EU for conducting a thorough process to understand the gaming industry.

In addition to the challenges in the UK, the acquisition also faces obstacles in the US, where the Federal Trade Commission is suing to block it.

The filing of the appeal with the CAT was reported by Bloomberg and Sky News.

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When announcing the CMA's decision in April, Martin Coleman, the chair of the independent panel of experts conducting the investigation, stated Microsoft already had a dominant position and a head start in cloud gaming, and the deal would further strengthen that advantage, potentially undermining new and innovative competitors.

The appeal by Microsoft demonstrates the company's determination to challenge the CMA's decision, using its significant resources.

It remains to be seen whether the EU's conditional approval of the Activision acquisition opens up possibilities for both parties to find a potential alternative solution, although such a shift in tone and attitude would represent a substantial change from the current stance.

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