Microsoft’s acquisition of Activision Blizzard blocked by UK, here’s why – Times of India

In January 2022, Microsoft announced that it will acquire Activision Blizzard for a whopping $68.7 billion making it one of the biggest acquisition in the tech industry. However, for the deal to go through, Microsoft needed approvals from regulators. In a blow to the Satya Nadella-led company, UK has now blocked the deal. UK’s Competition and Markets Authority (CMA) said that “the merger could make Microsoft even stronger in cloud gaming, stifling competition in this growing market.”
Microsoft remains undeterred and will appeal
In a statement, Brad Smith, president, Microsoft said that the company will appeal the decision and that it remains committed to the acquisition.”The MA’s decision rejects a pragmatic path to address competition concerns and discourages technology innovation and investment in the United Kingdom,” said Smith in a statement.
The CMA argued that Microsoft already is dominant in the cloud gaming services and that if the acquisition goes through then “Microsoft would find it commercially beneficial to make Activision’s games exclusive to its own cloud gaming service.”
Smith, in the statement said, that Microsoft has already signed contracts to make Activision Blizzard’s popular games available on 150 million more devices. “We remain committed to reinforcing these agreements through regulatory remedies,” said Smith.
What is CMA’s concern?
CMA’s concern is that the deal would reinforce Microsoft’s advantage in the market by giving it control over important gaming content such as Call of Duty, Overwatch, and World of Warcraft. “The evidence available to the CMA indicates that, absent the merger, Activision would start providing games via cloud platforms in the foreseeable future,” said the regulator in a press release.
Martin Coleman, chair of the independent panel of experts conducting this investigation, said “Microsoft engaged constructively with us to try to address these issues and we are grateful for that, but their proposals were not effective to remedy our concerns and would have replaced competition with ineffective regulation in a new and dynamic market.”
Smith added that the regulator had a flawed understanding of the market. “We’re especially disappointed that after lengthy deliberations, this decision appears to reflect a flawed understanding of this market and the way the relevant cloud technology actually works.”