Microsoft Acquisition Of Activision-Blizzard Hits Major Snag After UK Regulatory Decision
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The Competition and Markets Authority (CMA) of the United Kingdom has provided its ruling for the Microsoft/Activision situation. They have blocked Microsoft’s attempts to acquire the game-holding company based on concerns over the cloud gaming market. As Microsoft already has a dominant hand in this market, the deal would give them even greater leverage and power; they allege that putting the company in this position would severely limit the growth and flexibility of cloud gaming.
Microsoft attempted to put forth a series of compromises, however, according to the CMA they fell short on several accounts. The company did not detail cloud-based models well enough, the Windows OS, and proposed a standard terms and conditions agreement rather than being determined by the state of the market. Intervention from the CMA would be mandatory regularly, stifling the development of cloud gaming as a whole.
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The chair of the independent investigators for the case Martin Coleman acknowledged that “gaming is the UK’s largest entertainment sector,” with cloud gaming on the rise in this market. Their concerns have spread well beyond the Call of Duty title, as cloud gaming provides an opportunity for the market to expand to other groups of gamers, making it “vital that we protect competition in this emerging and exciting market.” Coleman said that “cloud gaming needs a free, competitive market to drive innovation and choice” and that this “is best achieved by allowing the current competitive dynamics in cloud gaming to continue to do their job.”
This decision from the CMA provides a dour outlook for the future of this acquisition deal. The United States Federal Trade Commission (FTC) has been moving to block the deal since December 2022, alleging that the acquisition deal would give Microsoft an unfair edge in the market and the ability to suppress its competitors. The evidentiary hearing is set for August 2nd of this year. The EU Commission’s final decision is coming a lot sooner than that, on May 22nd.
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