Microsoft-Activision deal back in hands of UK regulator after court pauses appeal

LONDON (Reuters) -Microsoft’s Activision Blizzard (NASDAQ:) deal is back in the hands of Britain’s antitrust regulator after an appeals court granted an adjournment, and the grounds for why the UK should reconsider its block on the U.S. software giant’s takeover were published.

The Competition and Markets Authority (CMA) set out on Friday Microsoft (NASDAQ:)’s arguments for the reconsideration, as the U.S. battles to win UK approval to buy “Call of Duty” maker Activision.

Having initially blocked the $69 billion deal in April over concerns about its impact on competition in the cloud gaming market, the CMA has since reopened the file, after it was left increasingly isolated amongst world regulators in its opposition.

The CMA said it is likely to be able to reach a new provisional view on the restructured deal in the week beginning Aug. 7.

Explaining why the deal should now be given the green light, Microsoft argued that the binding commitments accepted by the European Union shortly after Britain had blocked the deal changed matters, court documents published showed.

The software company gave legally-binding commitments to European authorities that Activision games can be streamed for a decade after the merger, and has entered into agreements with NVIDIA (NASDAQ:), Boosteroid and Ubitus.

As part of that a monitoring and enforcement regime will be established, which Microsoft said should ease some of the CMA’s concerns.

Microsoft also argued that the terms of the CMA’s proposed block reached further than necessary to tackle its cloud gaming concerns, for example in covering Activision Blizzard’s King unit, which makes mobile device games like Candy Crush Saga.

The CMA said it understood that Microsoft considered the recent licensing deal it agreed with Sony (NYSE:) constituted a further material change of circumstance or special reason.

For its part, the CMA dismissed as “irrelevant and immaterial” to its decision to look again at the deal the failure by U.S. authorities to get it blocked in the courts there.

Britain’s Competition Appeal Tribunal provisionally approved the adjournment on Monday subject to further submissions from the parties. It formally granted it on Friday.