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Regulators stopped Microsoft’s acquisition of Activision.

Microsoft’s $75 billion acquisition is under ongoing competitive scrutiny.

 

Due to rising fears that the $75 billion acquisition of video game developer Activision Blizzard by Microsoft is anti-competitive and will prevent rivals from playing the popular game Call of Duty, detailed investigations are underway in Brussels and the UK.

 

According to two people with knowledge of the matter, Microsoft decided not to provide any remedies at this time, and as a result, the UK’s Competition and Markets Authority is anticipated to open a thorough inquiry this week.

 

The CMA raised concerns about the merger earlier this month, becoming the first worldwide antitrust agency to do so. The CMA gave Microsoft five days to respond to its concerns or risk a prolonged “phase 2” investigation.

 

Since the acquisition was announced eight months ago, the corporations have already engaged in pre-notification stage negotiations with Brussels authorities. This shows how meticulous officials will be during the investigation.

 

Once Microsoft formally submits its case in Brussels in the coming weeks, regulators and other parties engaged in the sale anticipate a protracted EU inquiry. Because of the scale of the transaction, the characteristics of the buyer, and the growing worries from competitors, notably Sony, authorities will take their time to review it, according to sources familiar with EU policy.

 

A person in Brussels acquainted with the transaction said, “It is a large deal, a difficult deal. “It requires a thorough inquiry.”

 

This comes after Sony last week charged Microsoft with deceiving authorities and the gaming industry about its promises to continue offering Call of Duty on PlayStation consoles. It claimed that Microsoft had only offered to continue publishing the popular game on the PlayStation for a finite period of time.

 

The UK’s action highlights the challenges that Microsoft must overcome to close its largest-ever transaction. The US tech giant hopes to finalise the transaction by the end of June 2019, but first it must get over regulatory obstacles in nations ranging from New Zealand to the US.

 

According to persons with knowledge of the matter, Microsoft decided not to present any remedies to the CMA at this time since there were no evident commitments the UK agency would be likely to accept.

 

Except in exceptional circumstances, the watchdog normally does not accept behavioural remedies at the conclusion of a phase 1 probe, such as promises to preserve access to a good or service.

 

It was “nearly hard” for Microsoft to provide a remedy that would stop the investigation from turning into a comprehensive antitrust investigation, according to one competition lawyer with knowledge of the issue.

 

Activision’s acquisition comes at a time when authorities all around the world are worried that they haven’t intervened as much as they should have in relation to earlier Big Tech mergers.

 

Gaming rivals express concern that Microsoft will make short-term commitments that it can easily “wriggle out of.” In order to ensure that they can access all games “on equal terms and in perpetuity,” Sony and other parties want the commission to compel Microsoft to make such a promise.

 

Instead of making Call of Duty an Xbox-exclusive game, Microsoft has stated that it will continue to make the game available on other companies’ gaming systems, such as the PlayStation. We want people to have greater access to games, not fewer, said Brad Smith, president and vice-chair of Microsoft.

 

During the second phase of the examination, when an impartial panel will carefully examine the deal and explore potential antitrust solutions, the firm may decide to formally pledge to the CMA to ensure the access to games of its rivals.

Himanshu Mahawar

Himanshu Mahawar is the Editor and Founder at Flaunt Weekly.

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