UK regulators have ruled. The planned mega takeover in gaming is about to fall through
Shock news for Microsoft! The takeover deal with Activision Blizzard announced last year is now in danger of falling through because of British competition authorities.
UK bans takeover
After the British competition watchdogs at the Competition and Markets Authority (CMA) already named problems after an initial review of the deal, they now made the final ruling. In a notice on April 26, the CMA prohibited the acquisition by Microsoft, primarily with regard to the exclusivity of certain titles as well as market power in the cloud gaming market.
While Microsoft and Activision had offered to keep their games on all platforms for at least ten years, this concession did not go far enough for the CMA. In their reasoning the authorities also clarified that the compromise offers by Microsoft and Activision Blizzard would also entail broader and ongoing issues. After all, the authorities would then have to review the provisions made for years and also demand.
So said Martin Coleman, one of the independent experts involved in the decision, that the acquisition would have replaced competition from rivals with ineffective control.
Microsoft and Activision announce protest
From the industry side, of course, came direct protest.
We remain fully committed to our acquisition with @ATVI_AB and will appeal today’s determination by the CMA. Here’s our statement. pic.twitter.com/ylvDP5RUqQ
– Brad Smith (@BradSmi) April 26, 2023
So Brad Smith, vice chair and president at Microsoft, said they were disappointed by the decision, which was not comprehensible with the current state of cloud technology. This would pit the U.K. against innovation and investment in new technologies.
Both Activision and Microsoft have already announced legal action against the decision.
Since the announcement of the acquisition in January 2022, the deal has been scrutinized by numerous authorities worldwide. In addition to the UK authorities, particular attention is being paid to the competition authorities in the USA and the EU. The deal is still under scrutiny in both America and Europe, where the decision could also go against industry officials.
