How Microsoft Could Close The Activision Deal In The UK

After its court victory against the Federal Trust Commission on July 11, Microsoft’s plan to acquire Activision Blizzard just took a huge step forward. The deal still faces a few challenges, and in the UK, Microsoft still has to appease the Competition and Markets Authority. To do this, Microsoft may give up control of its cloud-gaming business in that region as it seeks to close the deal before the July 18 deadline.

According to a Bloomberg report, Microsoft could sell off the cloud-based market rights for games in the UK to a telecommunications firm. “It’s all quite debatable, but I believe the most likely route to allowing the deal to close by Tuesday is for the CMA to issue a derogation from its interim order,” said competition lawyer and ex-CMA legal director Tom Smith, who referred to the UK regulator’s previous decision that forced Microsoft and Activision Blizzard to remain separate entities in that region. “They could allow the deal to close but require the Activision Blizzard business to be held separate pending the final order. The CMA would look reasonable while preserving its position.

As Microsoft looks to complete its bid to purchase Activision Blizzard for $68.7 billion, one of the other hurdles that it has to clear is an antitrust trial that the FTC will hold on August 2. The FTC is also appealing the court case and US district judge Jaqueline Scott Corley’s decision, who disagreed with the FTC’s argument that the acquisition would be sufficiently anti-competitive. A decision on the appeal is expected very soon, as the restraining order preventing Microsoft from closing the deal in the US only runs through July 14. If The FTC’s appeal isn’t granted, then the regulator’s temporary restraining order will expire at 11:59PM PT on July 14, which leaves the door open for Microsoft to close the deal in the next few days. Microsoft has until July 18 to complete its acquisition, or it’ll be liable to pay a $3 billion breakup fee to Activision Blizzard if an extension isn’t granted.

Dozens of other countries have approved the deal, and after Microsoft’s US court victory, company president Brad Smith said that attention would shift back to the UK. In a procedural move, the CMA extended its deadline for issuing a legally final order on the deal to August 29.

The CMA has also paused its litigation and Microsoft’s appeal has been halted for now. “Microsoft and Activision have agreed with the CMA that a stay of litigation in the UK would be in the public interest and the parties have made a joint submission to the Competition Appeal Tribunal to this effect,” Smith said.