Microsoft Activision deal experiences a major blockage by the UKs CMA

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    Microsoft’s attempt to make its largest acquisition to date has just made a significant downgrade. The CMA, a UK regulatory body, announced that it had rejected Microsoft’s offer to buy Activision Blizzard. Over the past few months, the CMA has studied the proposed acquisition, particularly voicing concerns earlier this year that the deal might hurt competition.

    Microsoft has been working hard to sign agreements for competing cloud platforms to gain access to Call of Duty and other games, however, the CMA asserts that it is opposing the deal due to concerns in the cloud market.

    A few weeks ago, the CMA revised and condensed its list of issues after taking into account evidence that Microsoft would not be inclined to pull the Call of Duty franchise from PlayStation or any other competing console platform. It appears that Microsoft didn’t go far enough to earn the CMA’s trust.

    In contrast to regulators in Saudi Arabia, Brazil, Chile, Japan, Serbia, and South Africa, who have recommended approval for the deal, the UK is the first significant regulator to oppose it. Before the acquisition can be finalized, Microsoft still needs approval from the European Commission and the SAMR in China, and the FTC in the United States is attempting to block the merger. The FTC appears reluctant to seek an injunction in the federal court system, according to a report, so Microsoft may try to complete the ABK deal without the FTC’s consent in the United States.

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    With the CMA having stopped the deal, it is unclear what will happen next. It is challenging to get past the CMA regulatory rulings appeals process. After the CMA decided to block, tech companies like Facebook have in the past simply abandoned acquisition attempts.

    The decision by the UK CMA will likely be appealed, as Microsoft President Brad Smith has indicated, setting the stage for a protracted, expensive, and time-consuming legal battle. Rarely have UK appeals procedures for CMA rulings resulted in decisions being reversed, but when $69 billion is on the line, it’s probably worth it for Microsoft.

    Bobby Kotick, CEO of Activision, also emailed the staff; it is available below. It describes how the company intends to challenge the UK regulator’s ruling. Kotick questioned the UK’s suitability as a location for tech investment once more. Due to Brexit’s negative economic effects, the UK is currently the worst-performing major economy. The current administration is rushing through bills that have businesses like WhatsApp and Signal threatening to leave the country entirely.

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