- Kyle Chua
UK Blocks Activision Blizzard Deal And Microsoft Says Is “Bad for Britain”
Updated: Dec 19, 2023
Microsoft isn't happy about the decision of the Competition and Markets Authority (CMA), the U.K.'s antitrust regulator, to block its proposed US$69 billion takeover of Activision Blizzard.
The software giant's executives are criticising the decision, with Vice Chair and President Brad Smith going as far to say that it's "bad for Britain" in an interview with BBC Radio 4 Today. "There's a clear message here – the European Union is a more attractive place to start a business than the United Kingdom," he added.
Smith also stressed that the U.K. "needs to look hard at the role of the CMA and the regulatory structure" if it wants to be known as a place "where technology is not only going to flourish, but be created". Microsoft already said the CMA's decision could affect future investments in the U.K.
The CMA fired back at Microsoft and Smith, saying "It is the CMA's job to do what is best for the people, businesses and economy of the U.K., not merging firms with commercial interests." It emphasised that it wants to maintain competition in the market to bring more innovation and more choice for consumers. "Those are the best conditions to attract investment and support growth," the regulator said.
Microsoft and Activision said it'll continue to pursue the deal, and will appeal the CMA's decision.
Microsoft announced its bid to acquire Activision Blizzard in January 2022 in one of the largest acquisitions in the video game industry to date. The acquisition plays into the company's plan to beef up its library of first-party games and exclusives as it continues to lean towards its subscription-based cloud-gaming platform. If the deal pushes through, Microsoft can become the new owner of Activision Blizzard's most popular franchises, which include Call of Duty, World of Warcraft and Candy Crush, among others. Microsoft said Activision Blizzard can also help it make more games in mobile phones, where there is a large market of gamers.
For those unfamiliar, cloud-gaming is a Netflix-style service that allows players to choose games from a catalogue and play them via cloud streaming. The new distribution approach saves players from having to buy the games they want to play individually.
The CMA announced it was blocking the deal on Wednesday, 26 April over antitrust concerns. The regulator believes that if the deal is concluded, Microsoft could become a monopoly player in the growing cloud-gaming market, possibly holding a 60% to 70% market share.
For the deal to push through, it has to secure approval from regulators in the U.K., the U.S. and the EU.
Microsoft isn't happy about the decision of the CMA, the U.K.'s antitrust regulator, to block its proposed US$69 billion takeover of Activision Blizzard.
The software giant's executives are criticising the decision, with Vice Chair and President Brad Smith going as far to say that it's "bad for Britain".
The CMA announced it was blocking the deal over antitrust concerns.