Microsoft's UK appeal for Activision buy paused for two months

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The appeal process against the UK's block on Microsoft's proposed acquisition of Activision Blizzard has been paused for two months.

Microsoft and Activision Blizzard were due to face the Competition and Markets Authority in court next week after the regulator said it would not approve the $68.7 billion deal earlier this year.

However, both Microsoft and the CMA requested last week that the Competition Appeal Tribunal, which was to oversee the case, pause proceedings while the platform holder prepared new proposals for the deal that might address any concerns.

Reuters reported that the Competition Appeal Tribunal has agreed the hearing for Microsoft's appeal should be adjourned.

David Bailey, one of the CMA's lawyers, said: "Based on the discussion to date, both sides – Microsoft and the CMA – have confidence that Microsoft notifying a restructured transaction is capable of addressing the concerns that the CMA has identified."

In a statement to GamesIndustry.biz, a Microsoft spokesperson said: "We're grateful the UK's Competition Appeal Tribunal has conditionally agreed to pause the formal appeal process subject to additional information. As we've said before, we are considering how the transaction might be modified to address the CMA's concerns. Microsoft and Activision Blizzard have agreed with the CMA that this is in the best interest of finding a prompt path forward."

Last week, the CMA said it would aim to make a decision on the new proposals before August 29.

While there is no word on what Microsoft's proposed changes are, it will almost certainly be centred around its cloud gaming business, as the platform holder's dominance in this space (if that market grows significantly in the years to come) was among the CMA's chief concerns.

The request to pause the appeal followed immediately after the US Federal Trade Commission was denied a preliminary injunction preventing Microsoft from completing the transaction ahead of both the deal's July 18 deadline and the FTC's administrative hearing in August.

However, Bailey told the Tribunal that the FTC's defeat "formed no part of the [our] thinking" when it chose to consider Microsoft's proposals.

The Microsoft-Activision deal is due to close today. If it does not, Microsoft will have to pay $3 billion to Activision Blizzard and renegotiate the acquisition.

The two companies are reportedly in discussions to extend this deadline.

You can keep up with Microsoft's efforts to acquire Activision Blizzard with our extensive primer.