Microsoft, Activision-Blizzard, and the CMA: So, what’s next? – IGN

Microsoft, Activision-Blizzard, and the CMA: So, what's next?  - IGN

In a surprise decision yesterday, the UK’s Competition and Markets Authority decided to block Microsoft’s planned $69 billion acquisition of Activision-Blizzard, citing concerns about Microsoft’s ability to dominate the emerging cloud gaming market with exclusives like Call of Duty.

While the deal has seen challenges in numerous other regions, including the US and the European Union, many expected the CMA to approve it, especially after March statement That Call of Duty console exclusivity was no longer a concern. So with legal challenges mounting globally and Microsoft set to appeal the CMA’s decision, many are now wondering what lies ahead for Microsoft and Activision-Blizzard in the UK and abroad.

The answer is of course complex, dependent on multiple regulatory bodies, time consuming and most of all expensive. We spoke to lawyers and analysts about the potential fallout if Microsoft were to pursue an Activision-Blizzard deal, and why we’ll be hearing about the deal for months, and possibly years. come on

What happened and why?

After a long review, The CMA has moved to block Microsoft from acquiring Activision-Blizzard, but not for many expected reasons. While much of the public debate has focused on the possibility of Call of Duty console exclusivity for the Xbox, the CMA decided in February that this was not really a serious concern. In the end, it wasn’t Call of Duty, but cloud gaming that convinced the CMA to fire back.

We’ve covered exactly what the CMA’s objections are to acquisitions related to cloud gaming Detailed elsewhere, but to summarize, CMA is concerned that if Xbox bought Activision Blizzard, it would be able to dominate the cloud gaming market by making games like Call of Duty and World of Warcraft not console-specific, but exclusive to its own cloud gaming platforms. . With this content powerhouse in its pocket, the CMA says, Microsoft can effectively control market elements such as subscription pricing and structure without significant opposition from other services that are missing these giant games. It doesn’t help that CMA already sees Microsoft as having a dominant position in emerging cloud gaming, thanks to its ownership of the Windows OS, significant cloud infrastructure and its already robust content library.

If this all sounds like a big deal, that’s because: for Microsoft to successfully pursue its plan to pay $69 billion for Activision Blizzard, it needs approval from regulators in various regions, including the UK, US and EU. . While some countries have already signed up, decisions by both the US and the EU are still pending, meaning the UK’s rejection could be one of more to come. And while Microsoft claims it will appeal, the longer this goes on, the more expensive and odious it becomes for the company.

What comes next?

As Alex Hefner, a competition partner at London law firm Fladgate, explained to me, Microsoft effectively has four weeks to submit an appeal document to the UK’s Competition Appeal Tribunal (CAT), after which the CMA “will decide whether it has acted. within the bounds of its sound discretion in reaching its final decision.

“This is generally a high hurdle for appellants and successful appeals of decisions by the CMA to block mergers are rare, if not unprecedented,” Hefner explained. “The overall appeals process can be expected to last three to four months in total. If the CAT upholds any appeal, the most likely outcome is that the case will be sent back to the CMA to reconsider its decision based on any criticisms upheld by the CAT.”

The CMA’s final judgment is bound to be criticized. Gamma Law’s David B. Hope pointed out that the CMA’s definition of “cloud gaming” as its own market segment is a difficult argument, adding that the CMA “picked up a few things to support the position that Microsoft is already a dominant player in cloud gaming.” .”

#Microsoft #ActivisionBlizzard #CMA #whats #IGN

Microsoft's Activision deal on life support as cloud gaming still sucks

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