CMA gives green light to reworked Microsoft-Activision Blizzard merger

 

The Competition and Markets Authority (CMA) has approved Microsoft Corporation’s acquisition of the major part of Activision Blizzard, Inc (Activision), excluding Activision’s cloud streaming rights outside of the EEA.

In April 2023, the CMA prohibited Microsoft’s proposed acquisition of the entirety of Activision. The CMA opened a new Phase 1 investigation in August 2023.

The reworked transaction involves Activision's global cloud streaming rights (outside the EEA) for all current and future Activision PC and console games released during the next 15 years (the Activision Streaming Rights), being divested to Ubisoft Entertainment SA, pursuant to a divestment agreement between Activision and Ubisoft, immediately before Microsoft acquires Activision.

The CMA is satisfied that the new deal will stop Microsoft from “locking up competition in cloud gaming as this market takes off, preserving competitive prices and services for UK cloud gaming customers.”   

This has been a high-profile transaction, attracting the criticism of commentators who challenged whether the UK’s merger control regime was suited to handle large tech mergers in a dynamic environment.  It was then subject to a stayed appeal before the UK’s Competition Appeal Tribunal and where Microsoft has made the case for the CMA to depart from its original order. The case culminated in a new Phase I probe to assess Microsoft’s restructured proposal.

Whether we will see a similar saga play out in the future remains to be seen. It may be conjectured whether the restructured deal proposal might have been offered earlier to avert the costs, delay and uncertainty that has prevailed in the interim.

But it is not all over (yet).  The transaction has yet to be approved by the Australian Competition and Consumer Commission.

https://www.gov.uk/government/news/microsoft-concession-a-gamechanger-that-will-promote-competition