UK Narrows Its Focus In Microsoft/Activision Investigation

The UK’s Competition and Markets Authority (CMA) is narrowing its focus as it investigates Microsoft’s proposed Activision Blizzard deal.

Microsoft has slowly been winning over regulators in its efforts to purchase Activision Blizzard for $68.7 billion. A big part of the company’s success has come from signing deals to ensure Call of Duty remains on competing consoles. The EU recently signaled it will allow the deal to proceed, and now the CMA has — provisionally — ruled that Microsoft no longer poses a threat to competition in the console market.

The CMA has received a significant amount of new evidence in response to its original provisional findings. Having considered this new evidence carefully, together with the wide range of information gathered before those provisional findings were issued, the CMA inquiry group has updated its provisional findings and reached the provisional conclusion that, overall, the transaction will not result in a substantial lessening of competition in relation to console gaming in the UK.

At the same time, the CMA still has concerns about Microsoft’s influence in the cloud gaming market.

The CMA’s addendum to its provisional findings today relates only to competition in the supply of consoles and not to competition in the supply of cloud gaming services, where the CMA is continuing to carefully consider the responses provided in relation to the original provisional findings. The CMA’s merger investigation continues, and it remains due to issue its final report by 26 April 2023.

“Provisional findings are a key aspect of the merger process and are explicitly designed to give the businesses involved, and any interested third parties, the chance to respond with new evidence before we make a final decision,” said Martin Coleman, chair of the independent panel of experts.

“Having considered the additional evidence provided, we have now provisionally concluded that the merger will not result in a substantial lessening of competition in console gaming services because the cost to Microsoft of withholding Call of Duty from PlayStation would outweigh any gains from taking such action.

“Our provisional view that this deal raises concerns in the cloud gaming market is not affected by today’s announcement. Our investigation remains on course for completion by the end of April.”

Although Microsoft’s deal isn’t out of the woods yet, the provisional finding is certainly good news and keeps the deal alive.

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