Britain’s competition watchdog has indicated it is preparing to give the green light to Microsoft’s proposed restructuring of its acquisition of Activision. In today’s update on the ongoing evaluation, Said of The transaction “made significant changes that substantially address the concerns we expressed regarding the original transaction earlier this year.”
The Competition and Markets Authority (CMA) blocked the $68.7 billion gaming merger in April on the grounds that it would significantly reduce competition in the cloud gaming market, but last month it launched a new investigation into the proposed restructuring deal filed by Microsoft. started. While calling for reconsideration, it also confirmed its April decision to block the original merger proposal.
The restructured deal proposes to sell Activision’s cloud gaming rights to rival games maker Ubisoft, but the CMA now says this will “substantially address previous concerns and move the deal closer to completion.” “It opens the door to
“In particular, the sale of Activision’s cloud streaming rights to Ubisoft puts this important content, including games such as Call of Duty, Overwatch, and World of Warcraft, under Microsoft control as it relates to cloud gaming. will disappear,” it says. . “The CMA initially found that Microsoft already had a strong position in cloud gaming services and could have used its control over Activision’s content to suppress competition and strengthen this position. Instead, the new deal will transfer cloud streaming rights for Activision’s games to independent player Ubisoft, maintaining open competition as the cloud gaming market develops over the next few years. .”
Regulators still have “limited concerns” that certain provisions in Activision’s sale of cloud streaming rights to Ubisoft “could be circumvented, terminated or unenforced. ” is related to whether or not. However, Microsoft has offered remedies aimed at ensuring the terms of the sale of Activision’s rights to Ubisoft are enforceable by regulators, which the CMA believes will resolve any remaining concerns. He said he had reached a tentative conclusion.
However, this is not the final step yet. A consultation has now begun until October 6th on Microsoft’s proposed remedies.
Colin Raftery, CMA’s senior director of mergers and decision maker for Phase 1, said in a statement:
This is a very different new deal that puts the cloud distribution of these important games out of Microsoft’s control and into the hands of a powerful independent supplier, Ubisoft.
Additional protections to ensure transactions are conducted properly will maintain the structure of the market and allow open competition to continue to shape the development of cloud gaming in the coming years, helping UK gamers. will give you access to Activision games. It’s available in a variety of ways, including as a cloud-based multi-game subscription service.
Microsoft and Activision have given them until the middle of next month to complete the acquisition, following an extension of the deadline agreed to in July. So the timeline is tight.
The CMA has also set a deadline of October 18 to complete its review of the proposed restructuring. Still, today’s announcement suggests that the stars are finally aligned for Microsoft-Activision.
This move to find new ways to block mega-mergers is unusual, but increasingly inevitable after UK regulators have found themselves isolated among the world’s major regulators in blocking mega-mergers. I feel that.
European Union authorities conditionally approved the acquisition in May. And late this summer, a U.S. court blocked the FTC’s attempt to halt the transaction, leaving the CMA’s block the only major hurdle facing Microsoft and Activision. British regulators are therefore in full force against Microsoft, Activision and other backers of the deal.
CMA CEO Sara Cardel again defended the CMA’s approach.
“CMA’s position has been consistent throughout: this merger will only proceed if competition, innovation and choice in cloud gaming is maintained,” she said in a statement. “In response to the original ban, Microsoft has significantly restructured the agreement and taken the necessary steps to address the initial concerns. It would have been much better if there were. This case highlights the potential costs to the parties if reliable and effective redress options exist but are not brought to the table in a timely manner. , indicating uncertainty and delay.”
a Reuters A report earlier this month suggested that concessions offered by Microsoft to break out of its deal with the CMA were attracting renewed attention from the EU’s competition regulator, with Microsoft’s proposals in the UK reported that it is seeking feedback from its competitors and customers.
Approval of the deal would have seen Microsoft agree to license major Activision games such as “Call of Duty” to rival game streaming platforms, but the UK’s restructured proposal would see the tech giant will no longer acquire cloud streaming rights to all current and future Activision games. It will be released elsewhere around the world in the next 15 years, i.e. outside the European Economic Area. Instead, these rights will be transferred to Ubisoft prior to the acquisition.
