The Domino Effect - UK Competition Authority Opens to Reconsidering Microsoft's Activision-Blizzard Acquisition

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The Domino Effect

 

The Competition and Market Authority (CMA) of the UK may be changing its position on Microsoft's acquisition of Activision-Blizzard. The authority has expressed openness to reconsidering its decision to block the merger if Microsoft can address the concerns raised in CMA's final report.

CMA was the first antitrust authority to block the merger, citing concerns about the potential impact on the future of cloud gaming. Microsoft has challenged this decision, and a hearing is scheduled for July 28. However, Microsoft, Activision, and CMA have agreed to pause the litigation in the UK. This pause will allow the three parties to work on a satisfactory restructuring of the transaction.

CMA's change in stance follows the FTC's loss of a motion for a preliminary injunction against Microsoft's acquisition of Activision-Blizzard. Brad Smith, Microsoft's representative, responded to the decision, saying:

After today's court decision in the U.S., our focus now turns back to the UK. While we ultimately disagree with the CMA's concerns, we are considering how the transaction might be modified in order to address those concerns in a way that is acceptable to the CMA. In order to prioritize work on these proposals, Microsoft and Activision have agreed with the CMA that a stay of the litigation in the UK would be in the public interest, and the parties have made a joint submission to the Competition Appeal Tribunal to this effect.


CMA clarified its position in a statement to IGN, saying:
We stand ready to consider any proposals from Microsoft to restructure the transaction in a way that would address the concerns set out in our final report. In order to prioritize work on these proposals, Microsoft and Activision have agreed with the CMA that a stay of litigation in the UK would be in the public interest, and all parties have made a joint submission to the Competition Appeal Tribunal to this effect.

 

While ThoughtsUnboxed maintains its perspective that the concerns surrounding cloud gaming are exaggerated, it acknowledges that cloud gaming is still a nascent niche within the gaming industry. The recent FTC vs Microsoft trial highlighted that cloud gaming is unlikely to become a major component of the gaming market soon. Given these factors, it is possible that the CMA and Microsoft will reach a resolution outside of the court, enabling Microsoft to proceed with the acquisition soon.

Sources:

IGN

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