The UK's Competition and Markets Authority is likely to approve Microsoft's $69 billion deal to buy Activision Blizzard after the companies made changes to address concerns about competition in the cloud gaming market.
Why it matters
The CMA's decision is significant as it indicates a reversal of its earlier stance and removes a major obstacle for Microsoft's acquisition of Activision Blizzard, which is one of the largest tech transactions in history. The approval of the deal will have implications for the cloud gaming market and the future of competition in the industry.
What the papers say
The UK's Competition and Markets Authority (CMA) initially blocked the deal between Microsoft and Activision Blizzard, but has now indicated that the revised proposal addresses its concerns. The CMA's CEO, Sarah Cardell, stated that the merger could only go ahead if competition, innovation, and choice in cloud gaming were preserved. Microsoft has made changes to the deal, including selling Activision's cloud gaming rights to Ubisoft for 15 years, to address the CMA's concerns. The European Commission has already cleared the merger, while the US Federal Trade Commission's request to block the deal was rejected by a federal judge. The approval of the deal by the CMA is seen as a significant step towards the completion of the acquisition.
How we got here
The UK's Competition and Markets Authority initially blocked Microsoft's acquisition of Activision Blizzard due to concerns about competition in the cloud gaming market. This decision caused backlash and criticism from Microsoft, who accused the UK of being 'closed for business' after Brexit. However, Microsoft and Activision Blizzard submitted a restructured deal, which included selling cloud gaming rights to Ubisoft, to address the CMA's concerns. The CMA's decision to likely approve the deal indicates a change in its regulatory stance and brings the acquisition closer to completion.
More on these topics
The Competition and Markets Authority is a non-ministerial government department in the United Kingdom, responsible for strengthening business competition and preventing and reducing anti-competitive activities.
Activision Blizzard, Inc. is an American video game holding company based in Santa Monica, California. The company was founded in July 2008 through the merger of Activision, Inc. and Vivendi Games.
Microsoft Corporation is an American multinational technology company with headquarters in Redmond, Washington. It develops, manufactures, licenses, supports, and sells computer software, consumer electronics, personal computers, and related services.