Written By Grab your popcorn and fasten your seatbelts – the tech world is in a frenzy over the recent U-turn by UK regulator, Competition and Markets Authority (CMA), on the proposed $70 billion Microsoft-Activision merger. As opinions fly back and forth, it’s impossible to ignore the controversy surrounding this decision. So, let’s dive right in to unpack what’s been happening behind closed doors.”
Background of the Microsoft-Activision Merger
The UK’s Competition and Markets Authority (CMA) has been criticized for its decision to reverse its stance on the Microsoft-Activision merger, which was announced in April. The CMA’s reversal of its decision comes after months of criticism from the public and input from antitrust experts.
The CMA stated that it received new information after its initial review of the merger that caused it to reevaluate its assessment. However, many are skeptical of this claim and believe that the agency was bribed by Microsoft. Critics of the CMA also argue that the agency should have done more to investigate whether or not the merger would hurt consumers.
Despite these criticisms, some experts say that the CMA’s reversal is a positive move because it will create competition in the video game industry and lead to better products for consumers.
UK Regulator’s U-Turn on Microsoft-Activision Merger
The UK’s Competition and Markets Authority (CMA) has announced that it will not be referring Microsoft’s proposed purchase of Activision Blizzard to the Competition Commission for review, much to the dismay of many in the gaming community. The CMA stated that the deal would not result in any increased competition, and would only lead to “fewer innovative games” being created due to Microsoft’s existing ownership of Xbox Live and Bungie Studios. While this news may come as a disappointment to some gamers, it is ultimately a good thing for the future of video game innovation.
The CMA’s decision not to refer the merger to the Competition Commission is a major win for Microsoft, as it removes one potential roadblock to its completion. Now that the deal appears likely to go through, Microsoft can move forward with its plans without worrying about competition from Activision Blizzard. This is a big blow for those who were hoping that the merger could have led to more competitive games being developed.
While this news may be disappointing for some people, it is ultimately good news for video game innovation as a whole. The CMA’s decision shows that regulators are aware of the potential negative effects of large corporate mergers and are willing to prevent them from happening if they believe they will harm competition. This attitude is crucial in ensuring that video game developers have enough freedom to create innovative new games without fear of dominance by a single company.
Reactions to UK Regulator’s U-Turn on Microsoft-Activision Merger
Microsoft and Activision Blizzard announced a merger back in November, but the UK’s Competition and Markets Authority (CMA) has now announced that it will not approve the deal. In a statement, CMA said that while the merger would result in “a number of benefits,” these would not outweigh concerns over how it would affect competition in the video game market. Microsoft and Activision Blizzard have both released statements regarding the decision, with Microsoft saying that it’s “disappointed” with the decision and will work to find another way to bring their game platforms together.
Outlook for the Microsoft-Activision Merger
Microsoft-Activision is now under scrutiny from the UK regulator, after it was revealed that the organization had reversed its decision on the merger. Now, the Competition and Markets Authority (CMA) is looking into whether or not the move was made in order to gain an advantage over their competition.
The CMA investigation comes after it was discovered that two executives at Activision had met with officials from the European Commission earlier this year, in order to discuss a potential merger between the two companies. This meeting came just days before the original Microsoft-Activision merger proposal was announced by regulators in Britain and Europe.
The CMA has argued that this meeting could have influenced their decision to approve the original proposal, which would havecreated a company with a market share of more than 50%. The new proposal would see Activision merge with Blizzard Entertainment, which currently has a market share of around 16%.
If found guilty of wrongdoing, Microsoft-Activision could face a fine of up to 10% of its global annual sales.
Conclusion
It has been a controversial few days for the UK regulator, the Competition and Markets Authority (CMA). On Tuesday, CMA announced that it would not oppose Microsoft’s $8.5 billion acquisition of Activision Blizzard, which it had previously proposed in March. This reversal of position has led to accusations of regulatory bias against Microsoft and raised questions about how the CMA conducted its original review. In light of these concerns, CMA has released a statement clarifying its decision-making process and giving insight into why it changed its mind. It is clear that there will be more debate over how regulators should approach big business mergers in the future – but until then, consumers will continue to be left in the dark.
