Microsoft, UK ask for two-month pause of appeal over Activision deal

By Sam Tobin

LONDON (Reuters) – Microsoft (NASDAQ:) on Monday asked a London tribunal to pause its appeal against Britain’s block on its $69 billion takeover of Activision Blizzard (NASDAQ:) to give the parties more time to resolve the dispute.

Britain’s competition regulator, the Competition and Markets Authority (CMA), in April became the first major regulator to block the acquisition of the “Call of Duty” maker, citing concerns about the impact on competition in cloud gaming.

The U.S. Federal Trade Commission (FTC) has also opposed the tie-up, but suffered a major defeat last week when a federal court rejected the FTC’s application to temporarily halt the deal.

In Britain, the CMA’s final report is usually the last word. Companies cannot offer remedies after its publication and their only recourse is to the Competition Appeal Tribunal (CAT).

But last week, less than an hour after a U.S. federal court ruled the deal could go ahead, the CMA said it could look again at a modified proposal. It later said a restructured deal could satisfy its concerns subject to a new investigation.

All sides applied for a two-month pause of the case at the CAT, which the CMA’s lawyers said in court filings will “allow the CMA and the parties to engage swiftly and constructively in relation to Microsoft’s proposals”.

Microsoft’s lawyers said in court filings that the CMA is “the critical impediment” to closing the deal and pausing the case would allow all sides to try and find a solution.

However, Judge Marcus Smith said he wanted to hear the lawyers on whether there was a “proper legal foundation” for the CMA to consider a modified deal.

The judge also asked whether the FTC’s initial defeat in the U.S. had been taken into consideration by the CMA.