Following the CMA’s decision to veto the Microsoft-Activation deal in the UK, the computer software giant plans to appeal.
UK Competition and Markets Authority Is blocked Microsoft’s acquisition of gaming publisher activism blizzard (Nasdaq: ATVI). On Wednesday, the UK’s top regulator opposed Microsoft’s acquisition of the “Call of Duty” publisher. it comes to judgment one month later The UK CMA deemed the tech giant’s imminent deregulation of the video gaming competition a non-threatening activism. However, the British competition regulator now believes that Microsoft’s ownership of Activision could stifle competition in the cloud gaming market.
In a press release, the CMA explained:
“Allowing Microsoft to take such a strong position in the cloud gaming market just as it begins to grow rapidly would risk stifling innovation critical to the development of these opportunities.”
The London-based nongovernmental government department also fears Microsoft Corporation (NASDAQ:MSFT) could commandeer Activision’s games exclusively for its cloud gaming platform. Such a potential move would only allow Xbox Game Pass access to the publisher’s older library, at the expense of other major players.
Microsoft regrets CMA’s decision to block Activision deal in UK
The CMA’s decision to block Microsoft’s $69 billion acquisition of the gaming publisher is a major blow to the computer software giant. Microsoft had hoped to convince authorities in the UK that owning Activision would still benefit competition. Nonetheless, the Redmond, Washington-based company plans to appeal against the decision.
Although cloud gaming is still in its early stages, Microsoft has already identified the technology as the next mainstream way to play games. The tech giant has previously attempted to quell concerns about any perceived monopolistic tendencies of the CMA – but was unsuccessful. Microsoft’s concessions include sharing exclusive Activision gaming properties with other competitors for an ongoing period.
However, the CMA wondered whether such agreements would be able to keep up with the times in an increasingly dynamic market. Looking at the terms and conditions offered by Microsoft, the UK regulator said that “there are significant risks of disagreement and conflict between Microsoft and cloud gaming service providers, particularly over a ten-year period in a rapidly changing market”.
Meanwhile, expressing Microsoft’s unwavering commitment to the Activision acquisition, Microsoft Vice President and President Brad Smith said:
“We are committed to strengthening these agreements through regulatory measures.”
Smith further noted that Microsoft has already signed deals that will make Activision’s games available on hundreds of millions of devices. The company’s vice chairman expressed his disappointment at the CMA’s decision after “prolonged deliberations”. According to Smith, the CMA’s decision rejects a practical way to address competition concerns and reflects a flawed understanding of the cloud gaming market. Furthermore, Smith pointed out that the CMA’s stance discourages technological innovation and investment.
Activision CEO confident of favorable hearing in appeals process
Activision CEO Bobby Kotick informed employees on the video game publisher’s joint appeals process with Microsoft in a letter to employees. Kotick was confident of a fair hearing from the UK Competition Appeals Tribunal because the deal was good for competition.
Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to strip crypto stories down to the basics so that anyone anywhere can understand without a lot of background knowledge. When he is not delving deep into crypto stories, Tolu enjoys music, loves to sing and is an avid movie lover.
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