- The British competition authority blocks the takeover of the video game maker Activision by Microsoft despite concessions.
- The US supervisory authority had previously filed a lawsuit against the project and pointed out the effects that distorted competition.
- Microsoft intends to lodge a complaint against the decision.
The $69 billion deal would transform the fast-growing cloud gaming market, according to the UK regulator, the CMA, in its decision to block the Activision takeover. Microsoft would gain control over important offers such as “Call of Duty”, “Overwatch” or “World of Warcraft”. The measures offered by the US group could not have dispelled the concerns of the cartel authorities.
As expected, Microsoft does not agree with the decision and intends to lodge a complaint. This decision is based on an incorrect understanding of the market and how cloud technology works.
Microsoft executive Brad Smith said UK regulators had rejected a pragmatic solution to their concerns and risked hurting investment and innovation in their country.
EU guards are also taking up positions
Activision shares fell more than 10 percent after the decision. “We will reconsider our growth plans in Great Britain,” announced the video game maker.
The Activision takeover by Microsoft is also being examined by the EU competition authorities, who want to make a decision by May 22nd. The US agency FTC filed a lawsuit against the takeover in December.
$3 billion for nothing
Microsoft has a strong position in the video game business played over the Internet. The CMA analysis showed that it could be commercially advantageous for the Xbox Group to hold back Activision titles such as “Call of Duty” for just one cloud service, argues CMA.
The Windows group had tried to dispel the concerns with concessions. Microsoft made deals with cloud gaming providers like Nvidia that would give them access to Activision Blizzard games for ten years. However, the CMA found that the agreements were insufficient, in part because some cloud business models and non-Windows operating systems were left out.
Microsoft and Activision Blizzard originally wanted to complete the acquisition by mid-July. If the deal fails due to resistance from the authorities, the games group is entitled to three billion dollars from Microsoft.