U.K. Competition and Markets Authority Extends Deadline for Microsoft’s Takeover of Activision Blizzard Review
LONDON — The U.K. competition regulator, the Competition and Markets Authority (CMA), has announced a six-week extension to its review of Microsoft’s takeover of video game publisher Activision Blizzard. The deadline has been extended to August 29, 2023, allowing the watchdog more time to review proposals made by both Microsoft and Activision Blizzard to address its concerns.
The British regulator has been a strong opponent of Microsoft’s $69-billion acquisition of Activision Blizzard. In April, the CMA had blocked the deal citing concerns over competition in the nascent cloud gaming market. However, the regulator seemed to soften its stance earlier this week following the dismissal of the U.S. Federal Trade Commission’s attempt to block the acquisition.
In response to the extension, a CMA spokesperson stated, “We stand ready to consider any proposals from Microsoft to restructure the transaction in a way that would address the concerns set out in our Final Report.”
The remaining concerns raised by the CMA revolve around the possibility of Microsoft making Activision games exclusive to its platform, as the company aims to tap into the growing cloud gaming market. Cloud gaming allows users to stream games on remote servers, similar to how Netflix users stream movies.
Microsoft has made several concessions to the CMA, offering to license some of its games, including those from Activision, to other cloud gaming providers. However, these proposals were rejected by the CMA, which deemed them difficult to enforce and insufficient to protect competition in the cloud gaming market.
Analysts suggest that Microsoft and Activision may need to present new proposals that go beyond previous offers to address the CMA’s concerns. This could include strengthened licensing agreements or even spinning off its cloud gaming business in the U.K.
Meanwhile, Bloomberg reported that Microsoft might consider selling off some of its cloud-based market rights for games in the U.K. to other companies as a means to appease the CMA.
This acquisition has also faced opposition in the U.S., but it gained momentum after the U.S. District Court for the Northern District of California ruled in favor of Microsoft and Activision. However, the U.S. Federal Trade Commission filed an appeal on Wednesday seeking a preliminary injunction to prevent the deal from proceeding.
As the deadline extension allows for further deliberations and proposals, both Microsoft and Activision will be working to address the CMA’s concerns and secure approval for the takeover, which will have significant implications for the future of the video game industry.