Microsoft’s Activision-Blizzard Deal Faces Uncertainty in Post-Brexit Britain
The battle between Microsoft and Britain over the proposed $69 billion deal to acquire Activision Blizzard has taken another turn, raising concerns about the country’s approach to deals in the post-Brexit era. The Competition and Markets Authority (CMA) has been in dispute with Microsoft since April when it opposed the takeover. Despite Microsoft’s attempts to resolve the issues, the CMA has maintained its decision to block the deal.
However, the CMA has agreed to review a separate restructured deal proposed by Microsoft. Under this new proposal, Activision would divest its cloud streaming rights to Ubisoft Entertainment, excluding the European Union. The aim of this carve-out is to avoid any conflict with Microsoft’s licensing agreement with rival cloud services. The European Union’s antitrust regulators have responded by stating that they will assess whether these new terms will impact the concessions they have already agreed with Microsoft.
The uncertainty and confusion in Britain surrounding this deal have left many questioning the CMA’s actions. Some argue that the CMA has been accommodating towards Microsoft, while others believe that the CMA overstepped its boundaries from the beginning. The CMA originally objected to the deal due to concerns that it would hinder competition in the emerging cloud gaming sector. Despite Microsoft’s offer to make Activision’s games available on other cloud gaming platforms, the CMA remained unconvinced.
The CMA’s stance against big technology companies reflects the tougher approach it has taken since becoming a standalone regulator after Brexit. The proposal put forth by Microsoft represents a shift from behavioral remedies to a more structural remedy, although it still maintains a link between Microsoft and Ubisoft. Experts caution that there may be further complications if the CMA seeks assurances on how Ubisoft will utilize the rights.
The extended duration of the examination of this deal has led many to question whether it has been time well-spent for all parties involved. Antony O’Loughlin, head of litigation at law firm Setfords, believes that the CMA’s actions have forced Microsoft to take unnecessary steps, delaying the final approval of the deal.
This ongoing saga has raised questions about the CMA’s power to block a mega-deal when it is not aligned with other global regulators. Microsoft criticized the CMA’s initial block in April, claiming that Britain was closed for business. Despite the setbacks, both sides can claim some measure of victory. The CMA has secured concessions that no other agency has achieved, while Microsoft appears to be on the verge of securing its deal.
The CMA will review Microsoft’s new proposal, with an announcement expected by October 18. If the CMA still has concerns about competition, it could initiate a lengthier inquiry. The outcome of this deal will not only impact Microsoft and Activision but also raises questions about the regulatory landscape for big tech deals in the future.
