Summary
The UK’s Competition and Markets Authority has started soliciting additional input onMicrosoft’s proposed acquisition of Activision Blizzard. The British regulatorblocked Microsoft’s $68.7 billion deal in late April, citing antitrust concerns.
AlthoughMicrosoft’s promptly appealed the UK’s rejection of the Activision Blizzard acquisition, that dispute has been put on hold in mid-July, when the CMA paused its legal actions against the tech giant in an effort to reach an agreement over the proposed transaction. The two have been negotiating ever since, with Microsoft recently providing the CMA with an overview of “material changes of circumstances” concerning its original acquisition proposal.
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The CMA is now soliciting additional feedback from gaming industry participants before it forms its own opinion on whether Microsoft’s newly reported changes in circumstances are notable enough to warrant an approval of the contested transaction. The tech giant’s latest argument comes down to the claim that the concessions it previously ceded to the European Union andtheCall of Dutydeal that Microsoft recently agreed with PlayStationshould be enough to alleviate the CMA’s antitrust concerns.
Back when it rejected the company’s original proposal, the CMA argued that there is a realistic possibility forMicrosoftto use Activision Blizzard’s extensive catalog in order to gain an unfair advantage in the fast-growing game streaming industry. Since policing the conglomerate’s post-acquisition behavior would require significant resources on the CMA’s part, the regulator decided that outright blocking the deal would be a simpler way of ensuring that the nascent game streaming market doesn’t fall prey to monopolistic behavior in its infancy.
And though theCall of DutyPlayStation agreement doesn’t directly address those concerns, the concessions that the EU extracted from Microsoft do; to secure Brussels' approval of the acquisition, the tech giant agreed to offer a free license to all EU citizens allowing them to stream any Activision Blizzard title via services rivaling its own Xbox Cloud Gaming platform. Microsoft is currently offering to extend that offer to all British nationals, as well.
Whether that concession will be enough to convince the CMA to approve the acquisition remains to be seen. The regulator previously dismissed a number of similar Microsoft-proposed remedies on account of them all coming with an expiration date. The EU streaming license agreement is also only valid for ten years following the hypothetical completion of the blockbuster transaction. But seeing how theUK agency already demonstrated willingness to reach an agreement for Microsoft’s Activision Blizzard acquisition, the deal is currently looking closer than ever to materializing.
