Activision-Microsoft Deal: Taking on Call of Duty Deal Requires Precision Aim
The UK is taking on a tough target in challenging Microsoft Corp. 's $69 billion acquisition of video-game publisher Activision Blizzard Inc. While US and European regulators have yet to opine on the transaction, competition watchdogs are generally becoming more interventionist — especially in the case of tech giants. This deal offers a possible high-profile scalp.
Enter the UK Competition & Markets Authority. The agency concluded earlier this month that the combination poses a “realistic” threat to competition, setting the stage for a deeper probe. If this next investigation crosses the higher threshold of demonstrating that harm is “likely,” the chance of the transaction dying increases substantially.
Britain's approach to antitrust has evolved since Brexit, generating some notable divergences with Europe. In particular, the UK has stated its aversion to approving potentially anti-competitive deals just because an acquirer promises to be good — the so-called behavioral remedy.
That stance doesn't necessarily mean the UK is more likely to block mergers. Like the US Federal Trade Commission, it permitted Meta Platforms Inc. to purchase software firm Kustomer without remedies, while Europe granted approval only after the Facebook owner agreed to long-term constraints on its conduct. But it does show the value of convincing the UK watchdog that a deal isn't a problem in the first place.
With Activision, the CMA sees issues in three markets: games consoles, subscription services and — most significantly — cloud gaming.
It reckons Microsoft has incentives to withhold Activision titles like blockbuster Call of Duty from rival Sony Group Corp.'s PlayStation console. After all, a gamer's choice of hardware is often determined by its
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