Extended Deadline: Microsoft and CMA Granted Additional Time for the Activision Agreement in the UK

**Microsoft and U.K. Regulators Granted Delay in Activision Blizzard Bid Appeal**

Microsoft and British regulators have been granted more time by a court to address opposition to Microsoft’s $69 billion bid for video game maker Activision Blizzard. Judge Marcus Smith conditionally approved a joint request from Microsoft and the Competition and Markets Authority (CMA) to delay the appeal that was set in motion after the CMA initially rejected the deal.

**Regulatory Opposition to the Acquisition**

The deal has faced opposition from antitrust regulators in both Britain and the United States. In the U.K., the deal was blocked due to concerns that it would stifle competition in the small but fast-growing cloud gaming market. Rival company Sony, which produces the PlayStation console, also opposed the deal.

**Softening Opposition**

However, it appears that positions are softening. Microsoft announced a 10-year agreement with Sony to keep the popular Call of Duty video game series on the PlayStation if the merger goes through. Sony had previously held out on signing an agreement, but Microsoft’s provisional agreements with other licensing partners may have influenced their decision.

**Extended Consideration Period**

The CMA has given itself an additional six weeks to consider Microsoft’s submission outlining new developments and “special reasons” why the deal should be approved. In response, Judge Smith granted the delay, but requested written explanations from the CMA as well as a statement from Microsoft explaining the significance of the Sony transaction.

**Urgent Decision Needed**

Both Microsoft and Activision had agreed that if the deal hasn’t closed by an upcoming deadline, either party could walk away from the planned merger. To avoid potential consequences, including a $3 billion breakup fee, an urgent decision is necessary.

**Request for Delay in the Appeal**

Both Microsoft and the CMA requested the delay shortly after a court in the U.S. thwarted the Federal Trade Commission’s efforts to stop the acquisition. Judge Smith wants to ensure that the FTC’s failure to block the deal does not play a role in the CMA’s request for a delay.

**CMA’s Focus on Public Interest**

The CMA’s attorney, David Bailey, clarified that the FTC’s failure to block the deal in the U.S. is coincidental timing and that the CMA is focused on the public interest. Bailey expressed optimism that a restructured transaction could address the CMA’s concerns.

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