The UK’s Competition and Markets Authority (CMA) has defended its decision to block Microsoft’s proposed merger with Activision Blizzard, in the wake of its approval by the European Commission.
“The UK, US and European competition authorities are unanimous that this merger would harm competition in cloud gaming,” tweeted the CMA soon after the European Commission’s decision. “The CMA concluded that cloud gaming needs to continue as a free, competitive market to drive innovation and choice in this rapidly evolving sector.”
Earlier this month the CMA revealed that it was moving to block the $69 billion merger in the UK, with one of its major concerns being the long term impact that the deal would have on the future of cloud gaming.
The UK, US and European competition authorities are unanimous that this merger would harm competition in cloud gaming.
The CMA concluded that cloud gaming needs to continue as a free, competitive market to drive innovation and choice in this rapidly evolving sector.
[2/5]
— Competition & Markets Authority (@CMAgovUK) May 15, 2023
Whilst the European Commission (EC) initially shared some of the CMA’s concerns, remedies proposed by Microsoft were apparently sufficient to “fully address” the EC’s fears, with the regulator concluding that the deal would actually bring a “significant improvement” to the cloud gaming market.
As laid out in a statement from Microsoft’s vice chair and president Brad Smith, these remedies will require Microsoft to licence popular Activision Blizzard games “automatically to competing cloud gaming services”. In other words Xbox would not be allowed to Keep titles like Call of Duty and World of Warcraft as exclusive offerings for its Game Pass Ultimate and Xbox Cloud Gaming Platform, at least for the next 10 years.
However, Microsoft’s remedies have seemingly done nothing to shift the CMA from its anti-merger position.
“Microsoft’s proposals, accepted by the European Commission today, would allow Microsoft to set the terms and conditions for this market for the next 10 years,” continued the CMA’s Twitter thread. “They would replace a free, open and competitive market with one subject to ongoing regulation of the games Microsoft sells, the platforms to which it sells them, and the conditions of sale.”
The European Commission has required Microsoft to license popular Activision Blizzard games automatically to competing cloud gaming services. This will apply globally and will empower millions of consumers worldwide to play these games on any device they choose.
— Brad Smith (@BradSmi) May 15, 2023
The UK’s regulatory body concluded that “it stands by its decision”, while acknowledging that the European Commission was “entitled to take a different view”.
“We intend to meaningfully expand our investment and workforce throughout the EU, and we’re excited for the benefits our transaction brings to players in Europe and around the world,” commented Activision CEO Bobby Kotick in the wake of the European Commission’s decision. “The majority of the world’s gamers play on mobile phones. Europe has played a pivotal role in the development of gaming, especially mobile gaming, and we expect European game developers will continue to drive growth and innovation.”
Microsoft is planning to appeal the CMA’s decision to the UK’s Competition Appeal Tribunal to determine whether the authority acted “within the boundaries of its proper discretion in reaching its final decision”. Legal experts caution that it isn’t commonplace for the CMA’s decisions to be overturned, but it also isn’t unheard of.
Check out IGN’s explainer article for a more in-depth understanding of the motivations behind the CMA’s decision, what comes next in the ongoing legal saga.
Anthony is a freelance contributor covering science and video gaming news for IGN. He has over eight years experience of covering breaking developments in multiple scientific fields and absolutely no time for your shenanigans. Follow him on Twitter @BeardConGamer
For all the latest Gaming News Click Here
For the latest news and updates, follow us on Google News.
