Microsoft ‘could withdraw Activision from the UK’ to counter acquisition block, it’s claimed

Microsoft could consider pulling Activision from the UK market as one extreme option to bypass the country’s block of its proposed $69bn acquisition.

That’s according to a new Bloomberg report, which states that Microsoft president Brad Smith will meet with UK Chancellor Jeremy Hunt next week to voice his frustration over the Competition and Markets Authority’s (CMA) decision to block the deal.

Microsoft confirmed to the publication that Smith will be in London, where he’s giving a “scheduled talk about the potential of AI and the need for thoughtful regulation of it.”

He’ll also hold private discussions on other issues, “including the proposed acquisition of Activision Blizzard as we remain committed to finding creative and constructive ways to address remaining regulatory concerns,” a spokesperson said.

Hunt previously criticized the CMA’s veto, telling a business conference recently that competition watchdogs must “understand their wider responsibilities.”

However, Bloomberg claims that government ministers are also unhappy with some of Smith’s public criticism of the CMA, including stating that he believed the EU was a better place to do business than the UK.

It’s claimed that Smith will meet with Microsoft’s legal representatives to discuss the firm’s strategy to counter the CMA decision this week, including “extreme” options such as withdrawing Activision from the UK market, or bypassing the UK order and pressing ahead with the deal.

In theory, if Activision’s operation were moved to another European country outside of the CMA’s jurisdiction, its games could then continue to be sold via a distributor.

Microsoft’s appeal against the UK competition watchdog’s decision to block its acquisition of Activision Blizzard will be heard in court in July.

Further reading

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Microsoft reveals CMA appeal grounds and says UK regulator ‘overestimates the role of cloud streaming’

The company says the CMA's decision was "flawed for multiple reasons"

Microsoft, which is challenging the decision on five grounds, officially lodged its appeal against the CMA’s decision last week, and the case is set to be reviewed by the UK’s Competition Appeal Tribunal (CAT).

The Activision Blizzard deal has been cleared in almost 40 countries, including the European Union and most recently in South Korea.