The Competition and Markets Authority (CMA) – the UK’s competition regulator – has signaled its intent to conduct an in-depth review of Microsoft’s acquisition of Activision Blizzard.
Although approval from countries isn’t necessary for a deal to be completed, it can affect a company’s ability to conduct business within that territory. As such, should certain countries with large markets disapprove of a deal, it can affect a company’s long-term prospects.
The CMA believes that the proposed deal raises a number of concerns, and could warrant deeper investigation.
“Activision Blizzard has some of the world’s best-selling and most recognisable gaming franchises, such as Call of Duty and World of Warcraft. The CMA is concerned that if Microsoft buys Activision Blizzard it could harm rivals, including recent and future entrants into gaming, by refusing them access to Activision Blizzard games or providing access on much worse terms,” said the CMA.
Is the deal in jeopardy?
The CMA also believes that the deal could negatively affect the broader gaming ecosystem.
“The CMA is concerned that Microsoft could leverage Activision Blizzard’s games together with Microsoft’s strength across console, cloud, and PC operating systems to damage competition in the nascent market for cloud gaming services.”
Microsoft and Activision have five days to submit proposals on how to address the CMA’s concerns. Should they fail to do so, this would trigger an in-depth Phase 2 investigation, where an independent panel of experts will examine the evidence gathered, and decide whether the deal is in the best interest of British gamers and businesses.
Microsoft has signalled its willingness to work with the CMA to ensure that the deal progresses as planned. In a statement, Microsoft president and vice chair Brad Smith said “We’re ready to work with the CMA on next steps and address any of its concerns. Sony, as the industry leader, says it is worried about Call of Duty, but we’ve said we are committed to making the same game available on the same day on both Xbox and PlayStation.”
“We want people to have more access to games, not less.”
Last month, Saudi Arabia became the first country to approve the acquisition.