The UK regulator CMA, blocks a $68.7B Microsoft-Activision deal. Here is everything you need to know!
Microsoft's proposed acquisition of Activision Blizzard has been formally blocked by the UK's antitrust regulator, the CMA, over concerns about the impact on the cloud gaming market.
The CMA Decide Against Microsoft-Activision Deal
The UK’s antitrust regulator, the Competition and Markets Authority (CMA), has formally blocked Microsoft’s $68.7 billion acquisition of gaming company Activision Blizzard, citing concerns about the future of the cloud gaming market. The CMA feared the deal would lead to reduced innovation and less choice for UK gamers in the long term. Microsoft accounts for 60-70% of global cloud gaming services, and the CMA saw the sector as important to the growth of the gaming market.
The regulator viewed Microsoft’s proposed 10-year deals forcing it to make its games available to other cloud platforms as insufficient and requiring regulatory oversight, and feared that they risked disagreement between Microsoft and other cloud gaming providers. Microsoft and Activision Blizzard immediately announced that they would appeal the CMA’s decision.
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Microsoft President Brad Smith said the company would appeal, as the CMA’s decision discouraged technology innovation and investment in the UK. Activision Blizzard’s response was more aggressive, stating that the CMA’s report contradicted the UK’s ambitions to become an attractive country for technology businesses. It added that it would work aggressively with Microsoft to reverse the decision on appeal, and would reassess growth plans for the UK.
The CMA’s decision marks a blow to Microsoft and Activision Blizzard, both of which had hoped the regulator would approve the deal despite initial skepticism.
Both companies will monitor the effect of the CMA’s decision on other global regulators; the European Union is set to announce its findings by May 22, while the US Federal Trade Commission is challenging the deal in its internal court. If the deal is not closed before a July 18 deadline, Microsoft will be liable to pay Activision a termination fee in the billions of dollars.
What side are you on? The CMA or Microsoft-Activision?
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