Microsoft has hit a major roadblock in its attempt to acquire Activision Blizzard, as the UK’s Competition and Markets Authority (CMA) has determined that the deal “could harm U.K. gamers.” For the deal to go through, the CWA is suggesting some major concessions, like Activision Blizzard divesting in the Call of Duty or Activision segments of its business ahead of the acquisition.
A notice of possible remedies document asks Activision Blizzard to do one of the following three things if it doesn’t want the acquisition to be potentially prohibited.
- “Divestiture of the business associated with Call of Duty.”
- “Divestiture of the Activision segment of Activision Blizzard, Inc., which would include the business associated with Call of Duty.”
- “Divestiture of the Activision segment and the Blizzard segment of Activision Blizzard Inc., which would include the business associated with Call of Duty and World of Warcraft, among other titles.”
Basically, the CMA is very concerned about Microsoft having control of the business behind Call of Duty and wants it to forfeit that altogether. In a press release, the CMA explains that it’d be beneficial for Microsoft to make Activision games like Call of Duty exclusive to its own consoles and cloud services or for it to make versions of the game available on other platforms “materially worse,” despite Microsoft’s assertion that it wouldn’t be the case.
“Strong competition between Xbox and PlayStation has defined the console gaming market over the last 20 years,” said Martin Coleman, the chair of an independent panel of experts that conducted this CMA investigation. “Exciting new developments in cloud gaming are giving gamers even more choice. 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. We have provisionally found that this may be the case here.”
Overall, this is not a positive development for Microsoft, which is already facing lots of scrutiny from regulators in Europe and the U.S. There’s now a greater chance that this acquisition won’t go through or that Microsoft or Activision Blizzard will make some major concessions before it happens.
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