UK regulator questions Microsoft's Activision takeover bid

Published February 8th, 2023 - 08:07 GMT
UK regulator Microsoft Activision deal
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ALBAWABA — The United Kingdom regulator questioned Microsoft's planned $69-billion takeover of video game giant Activision Blizzard on Wednesday, throwing the deal into doubt.


The takeover, if it happens, would be the largest video game acquisition in history, as well as being the single largest acquisition that Microsoft has ever made.


In provisional findings, the U.K.’s Competition and Markets Authority said the deal could significantly harm competition and consumer choice.


On Jan. 18 last year, Microsoft launched its bid to create the world's third biggest gaming company by revenue by purchasing the owner of hit games "Candy Crush" and "Call Of Duty", but the deal has been plagued by antitrust concerns.


Echoing United States and European Union regulatory fears, the CMA said the deal could make Microsoft stronger and harm competition between its Xbox console and Sony's rival PlayStation, from its inquiries that started in September.


"The Competition and Markets Authority has provisionally found that the anticipated acquisition... may be expected to result in a substantial lessening of competition in gaming consoles and cloud gaming services in the U.K.," the authority said in statement.


The CMA report added that Microsoft's takeover "could result in higher prices, fewer choices, or less innovation for U.K. gamers".


"It's been estimated that there are around 45 million gamers in the U.K., and people in the U.K. spend more on gaming than any other form of entertainment including music, movies, TV and books," Martin Coleman, chair of the independent panel of experts conducting the CMA investigation, told Agence France-Presse.


"Our job is to make sure that U.K. gamers are not caught in the crossfire of global deals that, over time, could damage competition and result in higher prices, fewer choices, or less innovation," Coleman said.


The government regulator said the merger could hurt consumers by "weakening the important rivalry between Xbox and PlayStation gaming consoles".


Rivals have raised concerns that Microsoft would potentially restrict their access to the "Call of Duty" franchise.


"We are committed to offering effective and easily enforceable solutions that address the CMA's concerns," Rima Alaily, Microsoft's corporate vice president and deputy general counsel, said in a media statement.


"Our commitment to grant long-term 100-percent equal access to 'Call Of Duty' to Sony, Nintendo, Steam and others preserves the deal's benefits to gamers and developers and increases competition in the market," Alaily added, rebutting worries.


The CMA's press office said on its website that it would consider responses to its provisional findings from interested parties by March 1, ahead of issuing its final report by April 26.



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