Microsofts Activision purchase faces investigation in the UK

Microsoft’s acquisition of Activision-Blizzard will be investigated by the UK’s competition watchdog.

In a statement via CNBC, the United Kingdom’s Competition and Markets Authority (CMA) said that the investigation would “consider whether the deal could harm competition and lead to worse outcomes for consumers – for example, through higher prices, lower quality, or reduced choice.”

Those concerns were raised when the Microsoft Activision purchase was announced earlier this year. Following Microsoft’s other major acquisition – of Bethesda parent company Zenimax Media – there was speculation as to whether the purchase of Activision-Blizzard would fall foul of the United States’ Federal Trade Commission. The sheer weight of Microsoft’s gaming portfolio in the wake of those two purchases raised concerns over the monopolisation of the games industry. Microsoft has, however, pledged to keep Activision’s flagship Call of Duty franchise on PlayStation “into the future,” allaying some of those fears.

The CMA’s consultation with third-party interest groups will run until July 20, 2022, with a deadline for an initial decision set for September 1. The aim is to determine whether the Microsoft-Activision merger “will result in the creation of a relevant merger situation under the […] Enterprise Act 2002.” Under that act, the Office of Fair Trading is empowered to investigate any merger where the target company has a UK turnover in excess of £70 million. 

When contacted for comment, the CMA told GamesRadar+ that after the September deadline, if the Authority deems that the merger may harm competition, “the CMA has a duty to launch an in-depth assessment.” However, the companies involved may offer potential solutions to the CMA’s concerns, which will resolve the investigation at Phase 1, rather than moving on to subsequent phases.

This is just the latest stumbling block in a difficult journey for Activision and Microsoft. As well as the complexity of the Activision-Blizzard lawsuit, ongoing complexities including investigations of alleged insider trading, falling stock, and other conflicts of interest have all threatened the success of the merger, which is currently expected to complete by June 2023.

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