Microsoft, Activision-Blizzard and the CMA: So What’s Next? – ignition

Microsoft, Activision-Blizzard and the CMA: So What's Next?  - ignition

In a surprise decision, Britain’s Competition and Markets Authority yesterday took the decision to block Microsoft’s proposed $69 billion acquisition of Activision-Blizzard, citing concerns about Microsoft’s ability to capture the burgeoning cloud gaming Dominate the market with exclusives like Call of Duty.

While the deal has faced challenges in numerous other regions, including the US and EU, many expected the CMA to approve it, especially afterwards statement March that the exclusivity of the Call of Duty console was no longer an issue. With more legal challenges looming around the world and Microsoft set to appeal the CMA’s decision, many are now wondering what’s next for Microsoft and Activision-Blizzard in the UK and abroad.

The answer is, of course, complicated, dependent on multiple regulatory bodies, time-consuming and, most importantly, expensive. We spoke to lawyers and analysts to uncover the rocky road Microsoft faces if it wants to go ahead with Activision-Blizzard, what possible outcomes remain, and why we’ll likely be hearing about this deal for months and possibly years to come.

What happened and why?

After a long examination The CMA has taken action to prevent Microsoft from acquiring Activision-Blizzard, but not for the reason that many expected. While much of the public debate has revolved around the possibility of Call of Duty console exclusivity for Xbox, the CMA noted back in February that this wasn’t actually a serious issue. In the end, what convinced the CMA to fight back wasn’t Call of Duty, it was cloud gaming.

We’ve covered what exactly the CMA’s objections to the takeover are regarding cloud gaming in detail elsewhere, but in summary, the CMA is concerned that if Xbox bought Activision Blizzard, it could dominate the cloud gaming market by making games like Call of Duty and World of Warcraft exclusive to its own cloud gaming platforms rather than console exclusives offers . With these content powerhouses under its belt, the CMA says, Microsoft could effectively control elements of the market like subscription pricing and structure without significant resistance from other services that lacked these massive games. It doesn’t help that the CMA already sees Microsoft as a dominant position in nascent cloud gaming due to its ownership of the Windows operating system, significant cloud infrastructure, and already robust content library.

If this all sounds like a pretty big deal, it is: Microsoft’s plans to pay $69 billion for Activision Blizzard will require approval from regulators in various regions, including the UK, to succeed US and the EU . While some countries have already pledged, decisions are still pending from both the US and EU, meaning the UK’s rejection could be just one of others. And while Microsoft claims it will catch on, the longer it goes on, the more expensive and obnoxious it will be for the company to pull through.

What’s next?

As Alex Haffner, a competition partner at London law firm Fladgate, explained to me, Microsoft has effectively four weeks to submit an appeal document to the UK Competition Appeal Tribunal (CAT), which will then assess whether the CMA “did or did not act within its limits.” due diligence in making the final decision.”

“In general, this is a high hurdle for complainants, and successful appeals of CMA decisions blocking mergers have been rare, though not unprecedented,” Haffner said. “All in all, the appointment process can be expected to last three to four months. If the CAT grants an appeal, the most likely outcome would be a remittance of the case to the CMA to reassess its decision based on the criticisms upheld by the CAT.”

There are certainly criticisms of the CMA’s final decision. Gamma Law’s David B. Hoppe pointed out that the CMA’s definition of “cloud gaming” as a distinct market segment was a difficult argument, adding that the CMA “kind of picked a few things to support the position that which Microsoft already occupies dominant player in cloud gaming.”

#Microsoft #ActivisionBlizzard #CMA #Whats #ignition

Microsoft's Activision deal is on life support because cloud gaming still sucks

Microsoft’s Activision deal is on life support because cloud gaming still sucks

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