The Competition and Markets Authority (CMA) blocks Microsoft’s acquisition of Activision Blizzard

by Danny Craig  · 
The Competition and Markets Authority (CMA) blocks Microsoft’s acquisition of Activision Blizzard

It has been announced that the antitrust regulator, the Competition and Markets Authority (CMA), has blocked the deal from happening within the UK over concerns of possible damage to competitors within the cloud gaming space.

The details:

  • Despite Microsoft's intention to complete the deal after more than a year of battles with regulatory bodies, the CMA has confirmed via its official Twitter account that the acquisition has not been approved in the UK. This appears to be unexpected, given that Microsoft was reportedly preparing to acquire the publisher for $95 per share if the CMA and European Commission approved the deal, despite the FTC's opposition. The decision may now cause additional problems for Microsoft, as the European Commission may be swayed by the views of the CMA and the FTC on the deal.
  • The CMA claimed in a thread following the announcement that Microsoft already controls 60-70% of the current cloud gaming market across Xbox and Windows, with a successful Activision Blizzard deal causing it to grow stronger as the regulator discovered evidence that shows it would be "commercially beneficial" for the tech giant to make the games exclusive to Game Pass.
  • The CMA initially expressed concerns about the merger, similar to the FTC, but Microsoft attempted to gain approval by signing agreements with Nintendo, Ubitus, Boostroid, and Nvidia to bring its franchises, including those owned by Activision Blizzard, to their respective services and platforms. Last month, the CMA stated that it was no longer concerned about the impact of the deal on PlayStation and only cloud-based gaming services.
  • In response to the decision, Microsoft's vice chairman and president, Brad Smith, issued a statement on Twitter, assuring fans that the company is still "fully committed" to the acquisition and that it is "disappointed" with the outcome as it "reflects a flawed understanding of this market and the way the relevant cloud technology actually works.”
  • Activision Blizzard has also responded, with CEO Bobby Kotick confirming that the publisher will contest the decision in a new blog post. A spokesperson for the company also stated that the company will now "reassess [its] growth plans for the UK" and that the CMA’s report is a "disservice to UK citizens, who face increasingly dire economic prospects.”

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