Microsoft and Activision have formally lodged their complaint against the CMA for ‘preventing’ their deal.
Bloomberg reporter Katharine Gemmell shared this statement:
“A Microsoft spokesperson has confirmed the company has formally filed its appeal against the UK antitrust watchdog’s decision to block its $69 billion Activision Blizzard deal. On Terminal.”
When we reported on the CMA’s decision, the CMA had made it a point to state that they did put Microsoft’s proposed remedies under consideration. They ultimately decided that Microsoft’s offer of ten year deals for games to their competitors was no sufficient to address their concerns.
Subsequently, both Microsoft President Brad Smith and Activision Blizzard President and CEO Bobby Kotick immediately intimated that they intended to appeal the decision.
Unfortunately, in this case the documents were filed in private. Unless the CMA discloses the documents in full or in part, we won’t know the merits of the case Microsoft and Activision brought to the UK’s Competition Appeals Tribunals.
Florian Mueller shared an enlightening thread on his observations about the potential points of the case. Rather than share the thread in full, we’ll bring up some interesting points:
The CMA has won 67 % of all the merger cases filed vs it. While the numbers favor the CMA, Microsoft and Activision don’t have a completely uphill battle to find.
Florian believes that the CAT can overturn the CMA’s decision based solely on their rejection of Microsoft’s remedies. A CAT judge recently said similar things about remedies in the matter of a different competition case.
Florian also believes that the CAT will easily see that the CMA did not understand the technical details of the case, as many CAT judges are patent judges.
In terms of the judicial standard that Microsoft and Activision needed to meet to successfully launch an appeal for their case, Florian stated it wasn’t well understood.
The judicial standard is also called “Wednesbury unreasonableness”, defined as “so unreasonable that no reasonable person acting reasonably could have made it.” In plain English, this standard is sufficient for decisions based on legal errors, or factual claims without proper basis, to be overturned.
Florian says the CMA’s theory of harm fits this criteria because of their weak arguments. This is why the CAT will approve the appeal.
On a separate thread, Florian shared a later discovery that the CMA may have a potential conflict of interest. As reported by Jez Corden of Windows Central, the CMA’s Colin Raftery, their senior director, used to work at Cleary Gottlieb. Sony has hired the same Cleary Gottlieb to represent them at this same Microsoft Activision deal.
As you can see, there are many moving parts to this appeal, and we are only at the tip of the iceberg. Keep reading GameRanx for more updates on the Microsoft – Activision deal.
