The United Kingdom Competition and Markets Authority (CMA) is looking for an explanation to be put forward by Microsoft and Activision Blizzard as soon as possible. This is an urgent call for the planned merger to be explained. It is said that the deal is likely to lessen competition in the industry of gaming, which is an essential industry of today.
At the start of 2022, Microsoft announced planning to acquire Activision Blizzard. This merger was to be done for a whopping amount of $68.7 billion.
What is the concern of the CMA about the Microsoft and Activision Blizzard deal?
“Microsoft is one of three major companies, along with Sony and Nintendo, that has led the gaming console market over the past 20 years with limited new competitor entry. Activision Blizzard has some of the best-selling and most recognizable game franchises in the world, such as Call of Duty as well as World of Warcraft.
The CMA is concerned that if Microsoft buys Activision Blizzard, it could harm competitors, including current and future gaming players, by either denying them access to Activision Blizzard games or giving them access on much worse terms”, said CMA in a statement to express their concern about the said merger.
How can Microsoft and Activision Blizzard resolve the concern?
Microsoft and Activision Blizzard are currently in phase 1 of the investigation. During this phase, they have the chance to fix the issues by submitting proposals to CMA. This has to be done within 5 working days. However, suppose Microsoft and Activision Blizzard fail to do this.
In that case, the $68.7 billion deal will move into phase 2 of the investigation, which means a panel of experts who will be independent will decide the fate of the deal. This decision will be made after properly examining the risks seen in phase 1 as valid risks. There will be a thorough check to assess properly.
The CMA believes major potential harm is on the way, “The CMA is concerned that Microsoft could use Activision Blizzard games, along with Microsoft’s power in console, cloud, and PC operating systems, to harm competition in the nascent market for cloud gaming services.”
Next phase of the fate of Microsoft and Activision Blizzard as per policies
The next phase may mean that a proper investigation may result in a prohibitive merger move. There can also be a term and conditions to put particular business parts on sale. This could take u a few weeks, which have to be less than 25 weeks. However, an eight-week extension can also be on the cards regardless.
A previous example similar to that of the Microsoft and Activision Blizzard merger
In a previous case, there was a phase 2 investigation launched by the CMA to probe into the Nvidia/Arm deal. Therefore, in that case, the companies did not move forward with the merger.
Well, one can just hope that whatever happens is for the best! This merger can either turn out to be potentially harmful or can be just great, so one can only keep their fingers crossed for the outcome. The outcome of the investigation will be weeks away. However, the results will be seen much later of whether the investigation was able to find out the complete truth or not.
Frequently Asked Questions
Is Activision Blizzard company a tech company?
Activision Blizzard is a video gaming company and it is founded in California since 2008. There was a merger that created the company, the merger was between Vivendi Games and Activision.
Which company did Microsoft recently buy?
ZeniMax for $7.5 billion is the deal that Microsoft has gotten lately in September of 2020. Microsoft is known for it’s great choices and it is yet to see how this one will turn out to be.
Did Microsoft buy Linkedin?
Yes, Microsoft indeed bought Linkedin, and since then, it has been under the terms and conditions of Microsoft. It is one of the great buyouts of Microsoft and goes down in Microsoft history.