- A UK government regulator’s decision might see the deal not happening in the next 10 years
- It reasons the merger would negatively impact competition in cloud gaming
- Microsoft’s president said this has soured relationships between the company and the UK
Microsoft’s saga of acquiring gaming giant Activision Blizzard continues, as the UK’s Competition and Markets Authority (CMA) might push back the deal from happening for ten years.
CMA Releases Its Final Report
In early 2022, Microsoft made headlines in the tech and gaming spheres after it announced it wants to acquire Activision Blizzard for a whopping $69 billion, making it the largest purchase in the video game industry ever. Considering the size of the deal, it has been going through a ton of processes and checks by many national and international regulators.
So far, Microsoft and Activision Blizzard have been able to go through the work needed to conclude the deal, but it seems like one organization would prevent them from doing so. This is the United Kingdom's Competition and Markets Authority (CMA), which recently released its final report on the merger. This decision will likely prevent the deal from going through for the next ten years.
The UK government had already blocked Microsoft’s acquisition of Activision Blizzard last week when the CMA expressed concerns over the merger negatively affecting competition in the field of cloud gaming. Although several other companies have chimed in, saying the deal would not negatively affect cloud gaming, Sony, the Japanese gaming giant, has said the merger would irreparably harm competition. It seems this was enough reason for the CMA to double down on its efforts to continue with its ruling.
The UK organization’s final report exhaustively spells out the authority's reasoning for blocking Microsoft’s deal in a 400-page long paper. Under section 11.26, the document reveals that the CMA's normal practice would be to block the merger for a period of ten years unless the circumstances changed somehow.
While this does not mean with absolute certainty that the deal between the two tech giants is off the table for the next decade, Microsoft will have to find a way to make the CMA change its decision. The company could appeal to the Competition Appeal Tribunal (CAT) in an effort to get the matter revisited. However, considering the scale of the deal, this could take months. The matter would then once again fall back into the hands of the CMA.
Microsoft has not been taking the CMA’s recent attempts at stalling its acquisition of Activision Blizzard lightly. The corporation’s president and vice-chairman Brad Smith even went so far as to say that it's a “bad day for Britain”. He also stated that the CMA’s decision significantly undermined Microsoft's confidence in its ability to grow its business in Britain, damaging their relationship more than anything before.
Whatever the outcome of the situation is, it’s certain that the merger between Microsoft and Activision Blizzard will take many months, if not even years to resolve.
