UK’s CMA Confirms Microsoft-ABK Merger Will Be Harmful To Competition And Gamers
The UK’s Competition and Markets Authority (CMA) has been looking over Microsoft’s shoulder over antitrust concerns since the tech giant announced its plans to acquire Activision Blizzard. It’s investigation into the matter has now come to an end with the unsurprising conclusion that the merger will be detrimental to competition and subsequently to UK gamers.
“The CMA provisionally found that buying one of the world’s most important game publishers would reinforce this strong position and substantially reduce the competition that Microsoft would otherwise face in the cloud gaming market in the UK,” the regulatory body said in its provisional report. “This could alter the future of gaming, potentially harming UK gamers, particularly those who cannot afford or do not want to buy an expensive gaming console or gaming PC.”
Along with the report, the CMA has also proposed various concessions for Microsoft to consider to help alleviate the deal’s potential effects on the market, which include breaking up Activision Blizzard into smaller companies or keeping the Call of Duty franchise available on the PlayStation, Nintendo Switch, and other non-Microsoft consoles and cloud gaming services.
Analysts, however, are reading the CMA’s provisional report as a sign that the deal is likely to push through no later than mid-May, as reported by GamesIndustry.biz. “We read today's release as a signal that the UK knows it has a losing legal argument,” Wedbush analysts told investors. “In our view, the FTC figured this out late last year, and rushed to file suit to block the merger in the hopes of being first to extract concessions from Microsoft. We believe that the CMA reached the same conclusion during its review, and accelerated its formal objection to the deal and proposed remedies in order to step in front of the FTC and gain bragging rights.”
“The FTC has as yet to offer proposed remedies, and the CMA, by listing onerous structural remedies, has positioned itself to be the 'dragon slayer' in this action,” added the analysts.
Activision Blizzard CEO Bobby Kotick responded to the report with a memo to ABK staff saying that it’s a normal part of the CMA’s evaluation process and that it “opens the door to discuss various commitments Microsoft can make.”
