(CTN News) – Microsoft Corporation is challenging the British government’s decision to block its attempt to takeover “Call of Duty” maker Activision Blizzard for $69 billion, claiming that Microsoft’s cloud gaming services were assessed with “fundamental errors.”
An antitrust regulator in the UK, the Competition and Markets Authority (CMA), vetoed the deal in April, arguing that it could be detrimental to competition in the cloud gaming market, which sparked a furious backlash.
On Wednesday, Microsoft announced that it had filed an appeal against the ruling with Britain’s Competition Appeal Tribunal (CAT), and a summary of its arguments was published on Friday as part of the company’s appeal process.
In its summary, the company said that the CMA’s conclusion that the deal would lead to a substantial lower level of competition in the United Kingdom’s cloud gaming market was incorrect, and that it was not justified.
During the Competition Appeal Tribunal hearing, Microsoft will be arguing that the Competition Management Agency “made fundamental mistakes in its calculations and assessment of market share data for cloud gaming services by failing to account for the constraints associated with native gaming (when gamers can access games installed on their devices via digital downloads or physical discs).
In addition, it listed five grounds for appeal in total, and stated that it would challenge the CMA’s understanding of the cloud gaming market as well as the impact of the deal on the market.
According to Microsoft’s Corporate Vice President and Deputy General Counsel, Rima Alaily, the CMA’s decision was flawed for several reasons, including its overestimation of the role of cloud streaming in the gaming market and our place within it, as well as its unwillingness to consider solutions that were overwhelmingly supported by the public and industry.
As a result, we are confident in the strength of our appeal and the commitments we have made to increase competition and choice for our players today and for years to come.”
Appeals against CMA rulings are heard by the Competition Appeals Tribunal, which makes a judgement on the merits of the decision, and Microsoft does not have the opportunity to submit a new remedy against the decision.
Microsoft had submitted remedies to the EU’s competition authorities earlier this month that were broadly similar to those that the company proposed in the UK and the EU’s competition authorities approved the deal earlier this month.
The company has also appealed the US Federal Trade Commission’s decision to block a deal between the two companies on the grounds that, according to the FTC, the deal would suppress competition in the market.
A spokesperson for the CMA reaffirmed the CMA’s position on Friday, saying that the agency has prohibited the deal because it is concerned that it will lead to a reduction in innovation and choice in the UK’s cloud gaming market. We will defend our position in court if necessary.