UK Formally Pauses CMA Block of Activision Blizzard Acquisition

British High Court judge Sir Marcus Alexander Smith has formally paused the UK CMA’s block of Microsoft’s acquisition of Activision Blizzard, giving the two sides more time to negotiate.

The UK Competition and Markets Authority unexpectedly decided to block the acquisition in April, but its regulators and Microsoft have found some common ground in the wake of Microsoft’s regulatory victory over the U.S. Federal Trade Commission. And there has been a blistering and confusing series of backtracking ever since. Most recently, the CMA indicated that it would try to speed a new decision, thanks to a new round of concessions from Microsoft, before a previously-set July 28 appeals hearing and an August 29 deadline.

This new UK ruling puts the law behind the CMA’s words by pausing any further legal proceedings so that the two sides can reach an agreement. And there is every indication that they will reach an agreement, upon which time Microsoft will immediately acquire Activision Blizzard, given that the CMA is the only regulatory holdout.

This situation is unique on many levels, but one we’ve not discussed here is how rare it is for the CMA to backtrack as it has in this case: a CMA final report on a regulatory matter is its final word. For now, it’s unclear why the CMA is suddenly so eager to reassess the acquisition. But saving face—its decision was ridiculous and was contrary to every other regulatory assessment of the deal save that of the FTC, which was equally ridiculous and didn’t survive a legal challenge—is an obvious guess.

Besides, should the two sides reach an agreement, the CMA can at least claim that it wrung important concessions from Microsoft that will benefit UK-based competitors and/or consumers. A win-win, in other words.