Microsoft’s Activision Blizzard deal faces yet another backlash after UK launches an antitrust investigation – The $68.7 billion acquisition deal of Activision by Microsoft continues to face hurdles even after several months after the announcement. The potential deal is the subject of a formal inquiry by the UK’s Competition and Markets Authority, who could be affected by the mega merger.This allows “any interested party” to provide feedback on the probe before the CMA decides whether to launch a phase-2, in-depth investigation into whether the merger violates British antitrust laws.
The proposed deal is expected to be the biggest in the history of the technology sector to the extent of Microsoft emerging as a monopoly in this sector. It would give Microsoft, the company behind the Xbox gaming system and console, authority over well-known game franchises including Call of Duty, World of Warcraft, and Candy Crush. And now, the Competition and Markets Authority (CMA) gave both parties five days to come up with proposals to solve their problems, failing which it will intensify its probe.
Microsoft’s Activision Blizzard deal faces yet another backlash
According to the watchdog’s senior director of mergers, Sorcha O’Carroll,“Following our Phase 1 investigation, we are concerned that Microsoft could use its control over popular games like Call of Duty and World of Warcraft post-merger to harm rivals, including recent and future rivals in multi-game subscription services and cloud gaming.”
As the CMA notes, “The deal is set to be reviewed by competition authorities around the world and, as is usual practice, the CMA will engage with its counterparts as appropriate.” President of Microsoft Brad Smith said the company is “ready to work with the CMA on next steps and address any of its concerns.” Watchdogs from New Zealand to Brazil are still looking into the acquisition. FTC in the United States is also actively looking into the deal because the country has identical regulations in place for launching antitrust inquiries. So far only Saudi Arabia has agreed to the deal.