The ongoing saga surrounding Microsoft’s proposed acquisition of Activision Blizzard has taken another twist as the United Kingdom’s Competition and Markets Authority (CMA) has extended its deadline for considering Microsoft’s merger proposal. The CMA has cited insufficient time to thoroughly evaluate the “detailed and complex submission” put forward by Microsoft and has granted itself an additional six weeks to reach a decision. Although the new deadline is set for August 29th, the CMA hopes to provide its decision earlier.
Microsoft first announced its plan to purchase Activision Blizzard for $68.7 billion in January 2022, which immediately drew the attention of regulatory bodies. The CMA opened an investigation into the merger last fall, and in April, it released an inquiry report highlighting concerns over a “substantial lessening of competition” (SLC) in cloud gaming services within the UK if the acquisition were to proceed. The regulatory agency stated that blocking the merger would be the most effective and proportionate remedy to address the SLC and any adverse effects resulting from it.
This latest development comes on the heels of a temporary pause in the legal battle between Microsoft and the CMA, as both parties sought to negotiate a compromise. Microsoft President, Brad Smith, expressed the company’s disagreement with the CMA’s concerns but stated that they were considering modifications to the transaction to address the regulator’s issues in an acceptable manner.
In the US, the Federal Trade Commission’s (FTC) attempt to secure a preliminary injunction to halt the deal was also denied. Judge Jacqueline Scott Corley rejected the FTC’s request, allowing Microsoft and Activision Blizzard to continue their merger plans. However, the FTC has recently filed an appeal to the Ninth Circuit Court of Appeals, seeking to pause the acquisition.
These latest developments further prolong the uncertainty surrounding the Microsoft-Activision Blizzard acquisition. The CMA’s extension of the deadline reflects the complexity of the merger and the need for thorough examination before reaching a decision. Additionally, the ongoing legal battles in both the UK and the US complicate the process and introduce additional variables that could impact the ultimate outcome.
The proposed acquisition of Activision Blizzard by Microsoft has attracted significant attention due to the potential implications for the gaming industry and competition within the market. Activision Blizzard is one of the world’s largest video game publishers, known for popular titles such as Call of Duty, World of Warcraft, and Candy Crush Saga. Microsoft, on the other hand, has been steadily expanding its presence in the gaming industry through its Xbox platform and cloud gaming service, Xbox Game Pass.
If the merger were to proceed, Microsoft would gain access to Activision Blizzard’s vast library of intellectual property, including highly profitable franchises and established player communities. This could provide Microsoft with a significant advantage in the increasingly competitive gaming landscape, allowing them to further bolster their already strong position in the market.
However, concerns raised by regulatory bodies such as the CMA and the FTC center around the potential negative impact on competition, particularly in the cloud gaming services sector. The CMA’s initial inquiry report noted that the merger could result in a substantial lessening of competition in the UK, potentially leading to fewer choices and increased prices for consumers. These concerns highlight the need for a thorough evaluation of the merger’s potential impact on competition and consumer welfare.
The outcome of the CMA’s investigation and the pending legal battles in the US will have far-reaching implications for both Microsoft and the gaming industry as a whole. The decisions made by these regulatory bodies will shape the future landscape of the gaming market, determining the level of competition, choice, and consumer access to gaming content.
It is clear that the Microsoft-Activision Blizzard merger is a complex and highly significant deal that warrants careful consideration. The regulatory bodies involved are tasked with balancing the potential benefits of the merger, such as innovation and investment, with the need to protect competition and consumer interests. The extension of the CMA’s deadline and the ongoing legal battles highlight the challenges faced in reaching a resolution that satisfies all parties involved.
As the saga continues, stakeholders in the gaming industry, Microsoft, and Activision Blizzard will be eagerly awaiting the decisions of the CMA and the Ninth Circuit Court of Appeals. The outcome of these decisions will determine the future of the proposed merger and the shape of the gaming industry in both the UK and the US. Until then, the wait and uncertainty for all involved will continue.
