Microsoft Corp.’s fight against Britain’s veto of its $69 billion Activision Blizzard Inc. takeover got a boost when a judge said the court case can start weeks before the UK antitrust regulator’s preferred kick-off date.
Judge Marcus Smith said at the Competition Appeal Tribunal in London that hearings into the substance of the US software firm’s appeal can be penciled in for the week beginning July 24. Microsoft and Activision had both demanded a quick turnaround during an initial case-management session at the tribunal on Tuesday.
The CMA argued it wouldn’t be practical or fair to hear the case so soon and urged a late-September or October hearing. There will be “no incremental delay to the transaction” by setting it later, the CMA’s lawyer said at the hearing.
Despite the early court date, the case is set to be a tough fight for Microsoft as the UK tribunal’s powers are limited to looking at the legality of the decision rather than the substance. The CMA has never overturned a decision on any case that has been sent back for another look by the CAT.
The CMA “is the outlier here in its position and it creates the uncertainty that risks delaying the deal,” Daniel Beard, Microsoft’s lawyer, said at the hearing. “That’s 10 clearances now,” he said, pointing to the most recent blessing from authorities in South Korea, just days after the European Union waved through one of the biggest deals in history.
Microsoft is challenging the decision on five separate grounds. Lawyers for the company allege the CMA made “fundamental errors” in its calculation and assessment of market share data for cloud gaming services.
“The CMA’s decision is flawed for multiple reasons, including its overestimation of the role of cloud streaming in the gaming market and our position in it, as well as its unwillingness to consider solutions that received overwhelming industry and public support,” said Rima Alaily, deputy general counsel at Microsoft.
The CMA’s decision “ignores the facts, the law, and all commercial reality,” Activision said in a separate statement. “We’re looking forward to working with Microsoft to get this deeply flawed decision reversed.”
The CMA said it will defend its position in court and prohibited the deal because it had concerns that it would reduce innovation and choice.
©2023 Bloomberg L.P.
