Microsoft May Agree to ‘Small Divestiture’ with the CMA While FTC Still Wants to Fight – Reports
Yesterday we had major developments on the Microsoft/Activision Blizzard merger worth $68.7 billion. First and foremost, Judge Jacqueline Scott Corley of the North District of California denied the preliminary injunction the US Federal Trade Commission requested a month ago to block the deal.
Shortly after the big news, Microsoft and the UK regulator (the Competition and Markets Authority, or CMA) jointly decided to pause the ongoing Competition Appeal Tribunal (CAT) appeal to resume talks. Microsoft said in a statement:
Our focus now turns back to the UK. While we ultimately disagree with the CMA’s concerns, we are considering how the transaction might be modified in order to address those concerns in a way that is acceptable to the CMA. In order to prioritize work on these proposals, Microsoft and Activision have agreed with the CMA that a stay of the litigation in the UK would be in the public interest and the parties have made a joint submission to the Competition Appeal Tribunal to this effect.
According to CNBC's David Faber, Microsoft and the CMA might have agreed to a 'small divestiture' to address the UK regulator's concerns. Indeed, in the CMA's official response, we can read that it stands ready to consider 'proposals to restructure the transaction in ways that address the Final Report's concerns'. The CMA had previously hinted that it would accept the divestiture of Call of Duty, meaning that it would expect Microsoft to sell the IP and the studios working on it to someone else.
Of course, that's not likely, given that the winds have now turned in Microsoft's favor. The small divestiture could instead be Microsoft opting to 'carve out' Activision Blizzard content from the Game Pass library available in the
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