Microsoft and UK regulators agree to pause legal fight to negotiate Activision acquisition

On the same day a US federal judge denied the Federal Trade Commission's request for a preliminary injunction to prevent Microsoft from buying Activision Blizzard for $68.7 billion, the tech giant and the United Kingdom's Competition and Markets Authority (CMA) said they have agreed to take a break from their legal battle to negotiate a compromise that could allow the deal to move forward.

"After today’s court decision in the US, 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,” Microsoft President Brad Smith posted to Twitter. "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."

The CMA said it would block Microsoft's bid to buy Activision Blizzard at the end of April. At the time, the regulator argued the deal would harm the nascent cloud-gaming market by creating a monopoly player in Microsoft. It added, if the acquisition were to move forward as planned, Microsoft would have an "incentive to withhold [Activision Blizzard] games from competitors and substantially weaken competition in this important growing market." Microsoft had planned to challenge the decision, with a preliminary hearing before the Competition Appeal Tribunal (CAT), the body that hears appeals on CMA decisions, set for July 28th. In a statement the regulator shared with Engadget, it said it was "ready to consider any proposals from Microsoft to restructure the transaction in a way that would address the concerns set out in our Final Report," adding "Microsoft and Activision have agreed with the CMA that a stay of litigation in the UK would be in the public interest and all parties have made a joint submission to the Competition Appeal Tribunal to this effect.” The CAT still needs to allow the two sides to negotiate, but the tribunal is more than likely to rubber stamp the request.

Update 1:40PM ET: Added comment from the CMA.