In-depth competition survey launched on Microsoft’s Activision Blizzard deal

In-depth competition survey launched on Microsoft’s Activision Blizzard deal

Microsoft’s proposed acquisition of US $ 68.7 billion (£ 59.7 billion) of game publisher Activision Blizzard will face a thorough investigation amid concerns the deal is anti-competitive, it confirmed. UK competition regulator.

The Competition and Markets Authority (CMA) said it had postponed the acquisition for a so-called phase two investigation after Microsoft said it would not offer any proposals to address the regulatory authority’s concerns.

It comes after the CMA said on Sept. 1 that it was concerned the proposed deal could reduce competition in game consoles, multi-game subscription services, and cloud gaming.

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Call Of Duty is one of Activision Blizzard’s hit games (Tim Ireland / PA)

The CMA said it had given the two companies five business days to submit proposals to address its concerns, otherwise the deal would have undergone a more detailed phase two investigation.

Phase two investigations allow an independent panel of experts to further examine the risks identified in phase one.

On Thursday, the CMA stated that Microsoft communicated to it on September 6 that it would not make any proposals and had therefore made the postponement “on the basis that, on the information currently available to it, it is or could be the case that this merger can take place. wait for it to result in a substantial decrease in competition within one or more UK markets ”.

In addition to being one of the largest computer companies in the world, Microsoft is a key player in the gaming market, particularly through its Xbox range.

Activision Blizzard is best known as the creator of famous game series like Call Of Duty and World Of Warcraft.

Following its initial investigation, the CMA said it was concerned that if the deal was completed, it could harm rivals by denying them access to Activision Blizzard games or by providing access on worse terms.

The watchdog said it also received evidence on the potential impact of combining the two companies’ broader ecosystems and that Microsoft could leverage Activision’s games along with its strengths in consoles, cloud computing, and PC operating systems to harm. competition in the growing market for cloud gaming services – where gamers can stream video games.

Sorcha O’Carroll, CMA’s senior director of mergers, said at the time: “We are concerned that Microsoft may use its control over popular games like Call Of Duty and World Of Warcraft after the merger to harm rivals, including recent ones. and future rivals in multi-game subscription services and cloud gaming. “

The all-cash deal is also expected to face a full-blown investigation in Brussels, with the two companies reportedly having been in talks with regulators since the takeover was announced on January 18.

It is expected to likely lead to a lengthy EU investigation once Microsoft officially closes its case in Brussels.

Microsoft has been contacted for comment.

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