UK competition regulator says Microsoft's Activision Blizzard deal could "harm rivals"
The Competition and Markets Authority (CMA), the UK's competition regulator, believes Microsoft's planned $68.7 billion acquisition of Activision Blizzard could harm its rivals.
The CMA says the proposed deal raises a number of competition concerns, and suggests it could warrant further investigation based on the evidence it has already received.
"Activision Blizzard has some of the world’s best-selling and most recognisable gaming franchises, such as Call of Duty and World of Warcraft. The CMA is concerned that if Microsoft buys Activision Blizzard it could harm rivals, including recent and future entrants into gaming, by refusing them access to Activision Blizzard games or providing access on much worse terms," wrote the CMA.
The regulator said it has also received evidence relating to the potential impact of combining Activision Blizzard with Microsoft's broader ecosystem, which includes its hardware business, cloud platforms, and PC operating system -- all of which it believes could be "important" to its success in the cloud gaming space.
"The CMA is concerned that Microsoft could leverage Activision Blizzard's games together with Microsoft's strength across console, cloud, and PC operating systems to damage competition in the nascent market for cloud gaming services," it added.
The CMA believes the concerns outlined above warrant an in-depth "Phase 2" investigation into the deal. Microsoft and Activision Blizzard now have five days to submit proposals addressing those concerns before the deal is referred for a Phase 2 investigation, which allows an independent panel of experts to "probe in more depth the risks identified at Phase 1."
"Following our Phase 1 investigation, we are concerned that Microsoft could use its
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