The UK’s Competition and Markets Authority (CMA) has provisionally approved Microsoft’s purchase of Activision Blizzard King. Thus, the legal battle between the tech giant and the British regulator seems to be coming to an end, sealing the largest acquisition in the history of the video game industry.
This past May, Microsoft encountered its first major setback in the attempt to acquire ABK when the CMA decided to block the purchase, citing the risks it posed to the emerging cloud gaming market. Microsoft responded by filing an appeal with the UK’s Competition Appeal Tribunal and hired David Paddick, a lawyer specialized in these types of litigation. Despite the original rejection by the British authority, Microsoft went on to secure approval for the deal in other parts of the world. The European Commission was the first to give the thumbs up, followed by Asian powerhouses China, Japan, and South Korea. This past July, Microsoft achieved a major victory by defeating the FTC in the U.S. courts. Following this news, the CMA, Microsoft, and Activision Blizzard jointly petitioned the judiciary to suspend the ongoing appeal in the UK.
“We are prepared to consider any proposals from Microsoft that restructure the transaction so as to address the concerns outlined in our Final Report,” said a CMA spokesperson when asked about the appeal.”
The CMA’s decision after the agreement restructuring
This month, Microsoft presented a new agreement, which involves selling the cloud gaming rights for Activision Blizzard’s licenses to Ubisoft for 15 years. This ensures that these licenses can reach other platforms, preventing Microsoft from making them exclusive to its services. Thanks to this, the CMA has decided to provisionally approve this revised agreement, as they believe it addresses the previous concerns. Although the final decision is still pending, everything suggests that the new agreement is on track to succeed.
However, CMA director Sarah Cardell stated that it would have been ideal for this restructuring to have been presented during the original investigation. When asked about the new agreement, Sarah Cardell said the following:
“The CMA’s position has been consistent throughout: this merger could only proceed if competition, innovation, and choice in cloud gaming were preserved. In response to our original prohibition, Microsoft has substantially restructured the deal, taking the necessary steps to address our original concerns.”
“Nonetheless, it would have been much better if Microsoft had presented this restructuring during our original investigation. This case illustrates the costs, uncertainty, and delays that parties may face when a credible and effective solution exists but is not put on the table at the right time.”
After many twists and turns, blocks, appeals, and more, it seems the acquisition of Activision Blizzard will become a reality. Although the review of the new agreement might take up to 90 days, the tech giant is hopeful of closing the deal before October 18, which is the agreement’s deadline.
