Microsoft-Activision acquisition faces another hurdle thanks to UK regulatory probe

Cal Jeffrey

Posts: 3,529   +1,061
Staff member
In context: Although Microsoft and Activision are eager to come together and begin working as a single company, regulators could stall the finalization of their merger for quite a while. The FTC is already looking for anticompetitive practices in the US. Now the CMA in the UK has opened a similar probe into the matter in its jurisdiction. While such investigations are routine, they could tie up the approval process for months or even longer.

Microsoft has run into another obstacle in its attempt to acquire Activision Blizzard. On Wednesday, the UK's Competition and Markets Authority (CMA) launched a formal investigation into the record-breaking $68.7 billion deal announced in January. The regulator is concerned that the acquisition might violate UK antitrust laws and create an anticompetitive market.

"The Competition and Markets Authority (CMA) is considering whether it is or may be the case that this transaction, if carried into effect, will result in the creation of a relevant merger situation under the merger provisions of the Enterprise Act 2002 and, if so, whether the creation of that situation may be expected to result in a substantial lessening of competition within any market or markets in the United Kingdom for goods or services."

The CMA feels vigilance is necessary considering that Microsoft is the third largest tech company and Activision Blizzard is the fifth largest gaming company. The deal also follows the Redmond giant's recent $7.5 billion ZeniMax purchase. A successful acquisition of Activision would mark a considerable gaming industry consolidation falling under Microsoft's umbrella, making it the third largest gaming company in the world behind Tencent and Sony.

The investigation is not all that surprising. The CMA routinely looks at any merger where the acquired company's gross revenue exceeds £70 million or if the purchase would give the buyer 25 or more percent of the market in any given sector. Activision's net revenue in 2021 was $8.8 billion. That's £7.4 billion, well over the CMA's gross threshold for opening a probe.

The CMA's investigation will tie up the acquisition until at least September 1, when the regulator decides whether to approve the deal or move on to the second phase of the probe. In the meantime, the CMA will accept comments on the merger from interested parties. Expect consumer watchdog groups to chime in loudly.

The US Federal Trade Commission initiated a probe in February for similar reasons, which brought out many watchdog groups, including Public Citizen, Center for Digital Democracy, Communications Workers of America, The Repair Association, Public Knowledge, and American Economic Liberties Project. They fear the merger would hamper Activision employees' unionization efforts and have "anticompetitive horizontal effects" within the industry.

Image credit: Raimond Spekking

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psycros

Posts: 4,241   +6,055
If this merger is permitted a terrible precedent will have been set. You'll see a resulting flurry of consolidation in the industry, which always results in two things: higher prices and less consumer choice.
 

texasrattler

Posts: 1,306   +628
If this merger is permitted a terrible precedent will have been set. You'll see a resulting flurry of consolidation in the industry, which always results in two things: higher prices and less consumer choice.
Industry is already like that. This merger isn't going to change that.

I'd like MS to own Activision n hopefully make that company better n change some of its ways. Will games turn out any better, hard to say. Only time will tell that story.
 

dangh

Posts: 623   +977
Ms would totally kill the gaming industry competition with this merge. Already having Bethesda and still buying successful ips this would lead to lack of variance and ask other players would need to succumb to ms ultimatum: you can get our titles only of you allow go on your platform. And that would be serious crap.
Ms alone haven't made new ip great game for like a decade, this shows best where their interest is.
 

MaitieS

Posts: 164   +185
It's always funny to see salty Playstation fans being as always just salty when someone Microsoft buys a studio(s) and are acting like that is the worst thing yet when Sony announces a new studio they are all like: Damn good job Sony, I am surprised that it took this long etc. etc. bullshit. Just double standards as always covered in "I care about GaMiNg"... Buyout is already done this won't change anything ;) Something similar happened with Betheda as well.
 

dangh

Posts: 623   +977
It's always funny to see salty Playstation fans being as always just salty when someone Microsoft buys a studio(s) and are acting like that is the worst thing yet when Sony announces a new studio they are all like: Damn good job Sony, I am surprised that it took this long etc. etc. bullshit. Just double standards as always covered in "I care about GaMiNg"... Buyout is already done this won't change anything ;) Something similar happened with Betheda as well.
Tell me you've no idea about gaming market without telling me you "have no idea about gaming market" ;)
I don't care this much about Sony, I care more about Steam / GoG / Epic, because this will hit them ultimately.
And any time I see people saying "It's free in GP" my respect to humanity dies a little ;)
And nah, buyout is not 'already done'. It is similar situation as with nVidia and ARM. And most probably it will end same way.