Microsoft’s nearly $70 billion acquisition of Activision Blizzard is under review internationally, and no country takes this matter more seriously than the United Kingdom. The Competition and Markets Authority (CMA) completed the first phase of its investigation into the deal and is now recommending putting it through a second phase.
The call for extra scrutiny into the deal between Microsoft and Activision Blizzard stems from the CMA’s concern that such a deal may substantially stifle competition in the U.K.’s gaming market. Specifically, it’s worried that if and when the merger goes through, Microsoft may make Activision Blizzard’s portfolio of games exclusive to Xbox consoles, or make them available on PlayStation and Nintendo systems “on worse terms.” It’s also concerned that the company may leverage Activision Blizzard’s games across console, PC, and cloud systems to harm competition in the growing cloud gaming space.
The CMA is giving Microsoft and Activision Blizzard five business days to submit proposals that will address its anti-competition concerns. Otherwise, it will hire an independent panel to review the merger in more depth.
“Following our Phase 1 investigation, we are concerned that Microsoft could use its control over popular games like Call of Duty and World of Warcraft post-merger to harm rivals, including recent and future rivals in multi-game subscription services and cloud gaming,” said Sorcha O’Carroll, senior director of mergers at the CMA. “If our current concerns are not addressed, we plan to explore this deal in an in-depth Phase 2 investigation to reach a decision that works in the interests of UK gamers and businesses.”
Xbox head Phil Spencer shared a statement in a blog post explaining Microsoft’s view on the Activision Blizzard deal. He explained that the merger will help expand gameplay choices to players through Xbox Game Pass and extend the availability of games to mobile through cloud streaming technology. Spencer also reaffirmed Microsoft’s promise that Call of Duty will remain multiplatform.
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