UK dials up scrutiny of Microsoft’s $68.7BN Activision deal over antitrust concerns

techcrunch.com:

Microsoft’s $68.7 billion all-cash deal to bag gaming giant Activision Blizzard faces closer antitrust scrutiny in the UK where the country’s market watchdog has just announced it will move to an in-depth investigation — unless the pair submit suitable proposals to address its concerns in the next few days.

The Competition and Markets Authority (CMA) opened a formal probe of the acquisition in July, soliciting feedback on whether or not to move to a deeper so-called Phase 2 investigation. It’s now decided the deal does merit closer attention — taking a view that it could substantially lessen competition in gaming consoles, multi-game subscription services, and cloud gaming services.

Microsoft and Activision have five working days to submit remedies to the CMA to stave off this deeper probe (which would involve an independent panel of experts being appointed to dig into concerns unearthed during the Phase 1 investigation).

Commenting in a statement, Sorcha O’Carroll, senior director of mergers at the CMA, said:

“Following our Phase 1 investigation, we are concerned that Microsoft could use its control over popular games like Call of Duty and World of Warcraft post-merger to harm rivals, including recent and future rivals in multi-game subscription services and cloud gaming.

“If our current concerns are not addressed, we plan to explore this deal in an in-depth Phase 2 investigation to reach a decision that works in the interests of UK gamers and businesses.”

The CMA said it’s concerned that if Microsoft, owner of the Xbox brand, buys Activision Blizzard, a maker of very popular console, PC and mobile games, it could harm console rivals (“including recent and future entrants”) — by refusing them access to the Activision’s games