UK Watchdog Blocks Microsoft’s Activision Blizzard Deal

The UK's Competition and Markets Authority (CMA) has reached a decision on the Microsoft/Activision deal, voting to block it entirely....
UK Watchdog Blocks Microsoft’s Activision Blizzard Deal
Written by WebProNews

The UK’s Competition and Markets Authority (CMA) has reached a decision on the Microsoft/Activision deal, voting to block it entirely.

Microsoft announced in early 2022 that it was purchasing Activision Blizzard for $68.7 billion. The deal met with almost immediate criticism, especially from rival Sony, with critics saying the merger would give Microsoft too much control over the gaming market. Regulators in the US, EU, and the UK launched investigations.

The CMA has rendered its decision after a lengthy review process, concluding the proposed deal would strengthen Microsoft’s position in the cloud gaming market. The company already has an estimated 60-70% of the market, but the CMA says “the deal would reinforce Microsoft’s advantage in the market by giving it control over important gaming content such as Call of Duty, Overwatch, and World of Warcraft.”

Microsoft had proposed measures to address the CMA’s concerns and was at least partially successful. Following its efforts, the CMA ruled that Microsoft’s proposed acquisition was not a threat to the console gaming market, but its concerns regarding the cloud market remained, as evidenced by today’s ruling.

Martin Coleman, chair of the independent panel of experts conducting the investigation, said the decision came down to protecting UK gamers and giving them choice:

Gaming is the UK’s largest entertainment sector. Cloud gaming is growing fast with the potential to change gaming by altering the way games are played, freeing people from the need to rely on expensive consoles and gaming PCs and giving them more choice over how and where they play games. This means that it is vital that we protect competition in this emerging and exciting market.

Microsoft could always appeal the decision, but a favorable outcome is highly unlikely.

“Essentially, there has never been a successful appeal in the UK on an antitrust decision,” Aaron Glick, a merger arbitrage strategist at TD Cowen, told Bloomberg. “There does not appear to be a path forward for Microsoft.”

In all likelihood, the CMA’s decision spells the end of Microsoft’s efforts to purchase the gaming studio.

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