Following the European Fee’s (EC) approval of Microsoft’s acquisition of Activision Blizzard, the UK’s Competitors and Markets Authority (CMA) has taken to Twitter to clarify its own position on the deal.
Our response to the European Fee’s announcement in the present day on Microsoft/Activision ⬇
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— Competitors & Markets Authority (@CMAgovUK) May 15, 2023
The CMA’s resolution to dam the deal got here as a result of its considerations relating to how the acquisition would have an effect on competitors within the cloud gaming trade – a sector the place Microsoft already has a major benefit. These tweets spotlight the truth that each the UK CMA and EC are agreed in having considerations.
Nonetheless the EC hasn’t discovered them problematic sufficient to halt the deal, in contrast to the UK CMA. The speedy response following the information from the European Fee means that the CMA knew which means the EC have been going to show.
Sweetening the deal
Whereas Microsoft tried to deal with considerations relating to the house – together with prompt cures equivalent to issuing free licences to cloud gaming suppliers – the CMA concluded that these concessions didn’t go far sufficient to make sure wholesome competitors, and in reality would assist Microsoft improve its grip on the sector.
“The UK, US and European competitors authorities are unanimous that this merger would hurt competitors in cloud gaming,” wrote the group. “The CMA concluded that cloud gaming must proceed as a free, aggressive market to drive innovation and selection on this quickly evolving sector.”
“Microsoft’s proposals, accepted by the European Fee in the present day, would permit Microsoft to set the phrases and circumstances for this marketplace for the following 10 years.”
What does this imply for the deal?
Whereas the EU’s approval of the acquisition is prone to come as a breath of recent air for Microsoft and Activision Blizzard, each of whom stay dedicated to the deal, the CMA’s continued considerations could trigger some worries. Activision Blizzard advised shareholders in March that the deal may very well be scuppered as a result of “any motion has been taken by any governmental authority of competent jurisdiction, that … prohibits, makes unlawful or enjoins the consummation of the merger and has turn into last and non-appealable.”
Ought to Microsoft’s ongoing attraction towards the choice show fruitless, they might subsequently be compelled to step away from the desk fairly than lose entry to such a profitable market – and whereas some have argued that the EU’s resolution may provide helpful precedent for Microsoft within the case, it seems that the CMA is agency in its opinion that the deal may show unhealthy for enterprise.
We listed Activision Blizzard as one of many high 50 cellular sport makers of 2022.
