The UK’s CMA Says Microsoft’s Activision Blizzard Deal Could Hurt Competition

In the UK’s Competition and Markets Authority provisional findings published today, the country’s antitrust regulator says that Microsoft’s proposed acquisition of Activision Blizzard could be bad for competition. The CMA believes that the deal could result in “higher prices, fewer choices, or less innovation for UK gamers.”

These provisional findings are based on a five-month-long investigation that included meetings with Microsoft and Activision executives, the analysis of information from competitors, as well as an independent survey of UK gamers. In its provisional report, the UK’s CMA put emphasis on competition in the supply of cloud gaming services and consoles.

Regarding cloud gaming services, the CMA believes that Microsoft’s Activision Blizzard deal could make it very difficult for other cloud gaming services to compete, especially if Activision Blizzard games remain exclusive to Microsoft’s platforms. “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,” the CMA wrote.

As for competition in the consoles market, the CMA “provisionally found that weakening competition by restricting the access that other platforms have to Activision’s games could substantially reduce the competition between Xbox and PlayStation in the UK, in turn harming UK gamers.” This is despite Microsoft offering Sony a 10-year deal to keep Call of Duty on PlayStation consoles, and several Microsoft executives reiterating that it would make no business sense to pull Call of Duty games from the leading console platform.

Microsoft now has a little less than a month to address the CMA’s concerns, and the antitrust authority will share its final decision on the acquisition by  April 26, 2023. The Redmond giant shared the following statement from Rima Alaily, Microsoft Corporate Vice President and Deputy General Counsel:

We are committed to offering effective and easily enforceable solutions that address the CMA’s concerns. Our commitment to grant long term 100% equal access to Call of Duty to Sony, Nintendo, Steam and others preserves the deal’s benefits to gamers and developers and increases competition in the market. 75% of respondents to the CMA‘s public consultation agree that this deal is good for competition in UK gaming. - Microsoft is also facing a lawsuit from the FTC in the US over its acquisition of Activision Blizzard, and the European Union has also launched an in-depth investigation of the deal.  

Microsoft is also facing a lawsuit from the FTC in the US, and the European Union has also launched an in-depth investigation of the deal. The company initially expected to complete its acquisition of Activision Blizzard before June 2023, but it looks less and less likely that this is going to happen has expected.