Video Games

Microsoft, Activision-Blizzard, and the CMA: So, What’s Next?

In a surprise decision yesterday, the UK’s Competition and Markets Authority decided to block Microsoft’s planned $69 billion acquisition of Activision-Blizzard. This is due to concerns over Microsoft’s ability to dominate the emerging cloud gaming market with exclusive games like Call of Duty.

The deal saw challenges in many other territories, including the US and EU, but many expected the CMA to approve it. March statement That Call of Duty console exclusivity was no longer an issue. As such, with further legal issues looming around the world and Microsoft appealing his CMA decision, many now believe that both in the UK and abroad Microsoft and Activision-Blizzard are next. I am wondering what to do.

Of course, the answer is complex, multi-regulatory, time-consuming and, above all, expensive. We spoke to lawyers and analysts to unravel the bumpy road ahead for Microsoft if it wants to pursue Activision-Blizzard. What are the possible outcomes and why are we going to be hearing about this deal for months, maybe even years? come.

What happened and why?

after a long review CMA moves to block Microsoft’s acquisition of Activision-Blizzard, but not for the reason many expected. Much of the public debate has centered around a possible Call of Duty console exclusivity over Xbox, but the CMA ruled in February that this wasn’t really a serious issue. It was Cloud Gaming, not Call of Duty, that persuaded the to fight back.

We’ve covered exactly what the CMA’s objection to the acquisition regarding cloud gaming is. Learn more elsewhere, but in summary, if Xbox buys Activision Blizzard, the CMA will dominate the cloud gaming market by making games like Call of Duty and World of Warcraft not exclusive to consoles, but exclusive to its own cloud gaming platform. I am concerned that it will be possible. According to the CMA, Microsoft was able to effectively control market factors such as subscription pricing and structure without encountering significant opposition from other services that missed out on these giant games. It doesn’t help that the CMA already sees Microsoft holding a dominant position in the emerging cloud game thanks to its Windows OS ownership, significant cloud infrastructure and an already robust content library. It won’t work.

Microsoft’s plan to pay $69 billion to Activision Blizzard is subject to regulatory approvals in various regions, including the UK, US and EU, if it is to be successful. Several countries have already approved, but US and EU decisions are still pending. Microsoft claims it will appeal, but the longer this goes on, the more costly and unpleasant the company will comply.

what’s next?

As Alex Haffner, a competitive partner at London law firm Fladgate, explained to me, Microsoft has effectively given the UK Court of Competition Appeals (CAT) four weeks to file its appeal documents. and then the CMA decides “whether it acted”. within reasonable discretion in reaching a final decision. “

“Generally, this is a high hurdle that petitioners have to overcome, and successful appeals of the CMA’s decision to block a merger are not unprecedented, but they are rare,” Haffner said. explained. “Overall, we can expect the appeals process to last three to four months in total. , to return the case to the CMA.”

The CMA’s final decision certainly has its critics. Gamma Law’s David B. Hoppe noted that it was a difficult argument for the CMA to define “cloud gaming” as its own market segment, noting that the CMA “supports its position that Microsoft is already a market segment. We’ve carefully selected a few things,” he added. A dominant player in cloud gaming. “

Related Articles

Back to top button