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Microsoft Activision Deal Could Bring Harm To UK Gaming Community, Rules Regulator

Deadline 2/8/2023 Max Goldbart
© Provided by Deadline

Microsoft’s proposed $69B acquisition of Activision could bring harm to the UK’s 45M-strong gaming community, the nation’s competition body has ruled.

In a provisional finding delivered in the past hour, the UK’s Competition and Markets Authority (CMA) said that Microsoft “buying one of the world’s most important game publishers would reinforce [its] strong position and substantially reduce the competition that Microsoft would otherwise face in the cloud gaming market in the UK.” Both companies can respond to the ruling, which will conclude in April.

Microsoft already accounts for an estimated 60% to 70% of global cloud gaming services, said the ruling, and corners the market in other ways via its ownership of Xbox, Windows and Azure.

A small number of Activision’s flagship games such as Call of Duty play an important role in driving competition between consoles, added the CMA, which said Xbox and Playstation’s competition would “weaken competition” and “in turn harm UK gamers.”

“Our job is to make sure that UK gamers are not caught in the crossfire of global deals that, over time, could damage competition and result in higher prices, fewer choices, or less innovation,” said Martin Coleman, who chaired the CMA investigation.

Microsoft floated the $69B deal around a year ago and, while antitrust-buster FTC plans to challenge in court, both its Vice Chair and President Brad Smith and Activision CEO Bobby Kotick have recently said they’re confident the move will close.

Smith recently said Microsoft has been “committed since day one to addressing competitive concerns.”

Microsoft Corporate Vice President and Deputy General Counsel Rima Alaily said: “We are committed to offering effective and easily enforceable solutions that address the CMA’s concerns. 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.”

She added that 75% of respondents to the CMA‘s public consultation agree that the deal is good for competition in UK gaming. 

An Activision spokesman said: “We hope between now and April we will be able to help the CMA better understand our industry to ensure they can achieve their stated mandate to promote an environment where people can be confident they are getting great choices and fair deals, where competitive, fair-dealing business can innovate and thrive, and where the whole UK economy can grow productively and sustainably.”

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