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Microsoft will appeal UK CMA's decision to block Activision Blizzard deal

Microsoft has announced it plans to appeal today's decision by the UK Competition and Markets Authority to block the company's planned $69 billion acquisition of game publisher Activision Blizzard.

In a Twitter post, Microsoft Vice Chairman and President Brad Smith sent out this statement:

We remain fully committed to this acquisition and will appeal. The CMA's decision rejects a pragmatic path to address competition concerns and discourages technology innovation and investment in the United Kingdom. We have already signed contracts to make Activision Blizzard's popular games available on 150 million more devices, and we remain committed to reinforcing these agreements through regulatory remedies. We're especially disappointed that after lengthy deliberations, this decision appears to reflect a flawed understanding of this market and the way the relevant cloud technology actually works.

Microsoft did make a number of deals with rival cloud gaming services worldwide recently, including with NVIDIA Geforce Now, Boosteroid, and Ubitus, to make its games, and Activision Blizzard's games, available on those services for at least 10 years.

However, that apparently was not enough for the UK CMA, who stated that Microsoft's deals were "not sufficiently open to providers who might wish to offer versions of games on PC operating systems other than Windows."

Activision Blizzard CEO Bobby Kotick also posted his own response to the CMA's decision on the company's website. He stated:

Alongside Microsoft, we can and will contest this decision, and we’ve already begun the work to appeal to the UK Competition Appeals Tribunal. We’re confident in our case because the facts are on our side: this deal is good for competition.

The UK hopes to grow its leadership position in technology, and a combined Microsoft-Activision would accomplish exactly that. At a time when the fields of machine learning and artificial intelligence are thriving, we know the UK market would benefit from Microsoft’s bench strength in both domains, as well as our ability to put those technologies to use immediately. By contrast, if the CMA’s decision holds, it would stifle investment, competition, and job creation throughout the UK gaming industry.

It does sound like Microsoft and Activision Blizzard are not giving up, but it remains to be seen if this appeals process will be successful.

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