The CMA has
made a final order prohibiting the anticipated acquisition by Microsoft
Corporation of Activision Blizzard, Inc.
In April 2023
the CMA concluded on its final report that the acquisition may be expected to
result in a substantial lessening of competition in the market for the supply
of cloud gaming services in the UK.
The CMA has not
been satisfied that any change in circumstances warrants a different conclusion
to that reached in its final report.
Accordingly, its 22 August 2023 Order prohibits, except with the prior
written consent of the CMA, Microsoft from acquiring an interest (as a means of
conferring control) in Activision or any entity holding an interest in
Activision for 10 years. Activision is
subject to the same prohibition in relation to Microsoft.
Meanwhile
Microsoft and Activision have entered into a new, restructured transaction, under
which Microsoft will not acquire cloud streaming rights for existing Activision
PC and console games, or for new games released by Activision during the next
15 years (this excludes the EEA. Instead,
the rights will be divested to Ubisoft Entertainment SA (Ubisoft) prior to
Microsoft's acquisition of Activision
The CMA has said
that the restructured transaction is “substantially different from what was put
on the table previously”.
The CMA has
opened a new Phase 1 investigation to examine the new deal. The CMA invites
comments by 1 September 2023.
The unfolding
saga of events in this case is not what many observers expected. It seems that the revised deal is more of a ‘fix-it-first’
remedy with a prior divestment to a named third party than a revised transaction
structure as such. What matters is
whether this will be sufficient to address the concerns raised by the CMA in
the final report, principally around vertical foreclosure in cloud streaming
services.
https://www.gov.uk/government/news/microsoft-submits-new-deal-for-review-after-cma-confirms-original-deal-is-blocked
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