Thursday 9 Feb 2023
In a statement released on Wed 8 February, the UK’s Competition and Market’s Authority provisionally concluded that:
Microsoft’s proposed acquisition of Activision could result in higher prices, fewer choices, or less innovation for UK gamers.
UK CMA Provisional Conclusion, 8 Feb 2023
A key concern was that the merger would make MSFT stronger in the growing cloud gaming market, stifling competition and harming UK gamers who could not afford expensive consoles.
The CMA notes that MSFT already accounts for 60-70% of the cloud gaming market, and adding Call of Duty to its offering would give it a quasi monopoly.
Commenting on CMA’s provisional finding, Rima Alaily, Microsoft corporate vice-president and deputy general counsel, said:
“Our commitment to grant long-term 100% equal access to Call of Duty to Sony, Nintendo, Steam and others preserves the deal’s benefits to gamers and developers, and increases competition in the market.”
Rima Alaily, Microsoft corporate vice-president and deputy general counsel
She noted that 75% of respondents to the CMA’s public consultation believe the Microsoft-Activision deal is favourable for competition in UK gaming.
However it is telling that the CMA has now taken a lead in blocking mergers large Tech firms such as Facebook (blocked its acquisition of Giphy) and Microsoft. It has now become one of the most feared trustbusters.
Freed from the EU’s competition policy, the CMA revamped its guidelines in 2020 to give more weight to how post-merger markets might evolve. In Britain and Europe competition cases are pursued in an administrative system, not in a court, as in America. All of which gives the CMA considerable powers.
The CMA’s final report is due for 26th April 2023.
The Equity Analyst 