Written By On Monday, the UK’s Competition and Markets Authority (CMA) announced its decision to block Microsoft’s proposed $68.7 billion acquisition of gaming giant Activision Blizzard, citing concerns over potential market dominance.
The CMA stated that the deal could have resulted in a “substantial lessening of competition,” as Microsoft already owns several popular gaming franchises, including Minecraft, Halo, and Forza. The regulator also expressed concerns about potential harm to the gaming industry, as well as to consumers, due to higher prices and reduced innovation.
The decision comes after a months-long investigation into the proposed deal, during which both companies provided evidence and arguments in support of the acquisition.
Microsoft responded to the CMA’s announcement with frustration, calling it “disappointing” and “at odds with the facts and the law.”
In a statement, Microsoft said, “We strongly believe that this acquisition would have been good for the gaming industry, gamers, and society as a whole. We are confident that if we were given the opportunity to address the CMA’s concerns, we could have demonstrated the benefits of this transaction.”
Microsoft has ten working days to appeal the CMA’s decision, but the chances of a successful appeal are uncertain.
Industry experts have weighed in on the decision, with some arguing that the CMA’s concerns are valid and that Microsoft’s dominance in the gaming industry could harm competition and innovation.
“Microsoft’s acquisition of Activision would have given them a significant amount of power and control over the gaming industry,” said Sarah Lacy, a gaming industry analyst. “The CMA’s decision to block the deal is a positive step for competition and innovation in the industry.”
Others, however, have criticized the CMA’s decision as short-sighted, arguing that the acquisition would have provided benefits such as increased investment in gaming infrastructure and new job opportunities.
“It’s disappointing to see the CMA block this acquisition, which would have created opportunities for growth and innovation in the gaming industry,” said Paul Watkins, a technology policy expert. “The decision seems to be based on a narrow view of the market, rather than a broader understanding of the potential benefits.”
The CMA’s decision also comes amidst increasing scrutiny of big tech mergers and acquisitions, with regulators around the world taking a more cautious approach to deals that could result in market dominance.
It remains to be seen whether Microsoft will appeal the CMA’s decision or pursue alternative options for expanding its presence in the gaming industry. Regardless, the UK’s decision is likely to have implications for future big tech deals, and signals a shift towards a more cautious approach to consolidation in the industry.
