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Last week Microsoft filed its appeal against the UK Competition and Markets Authority’s decision to block its acquisition, and now the details of its appeal have been revealed. Microsoft said that the CMA made “fundamental errors” when assessing its position in the cloud gaming sector, a vital part of the UK’s decision to block the acquisition.
Microsoft said that the CMA failed to properly consider the constraints of “native gaming,” that is playing a game that is installed on your device, on cloud gaming services. Microsoft argues that cloud gaming shouldn’t be seen as a separate market, due to the potential for gamers to decide to switch to native gaming instead.
Along with correcting the CMA’s “erroneous, narrow, market definition” of cloud gaming, Microsoft points to “three long-term commercial agreements” that would bring Microsoft-owned games to other cloud services for the next 10 years, including Activision titles if the merger goes through.
These agreements were pivotal in the European Union’s decision-making, when it approved the merger earlier this month. “To us, this solution fully addressed our concerns,” said Margrethe Vestager of the EU’s decision. “And on top of that, it had significant procompetitive effects.”
Microsoft’s appeal of the CMA’s decision states five different grounds for appeal, each laying out an error in the original decision’s reasoning. As part of its appeal, Microsoft has asked to have the decision quashed “in its entirety,” as well as having the CMA pay the costs associated with appealing.
So far 37 countries have approved the acquisition, with the UK blocking it, and the USA yet to approve the deal. The Federal Trade Commission is suing Microsoft to try to block the deal, with the initial hearing not until August this year.
