Microsoft’s attempt to acquire Activision Blizzard has hit a major roadblock in the UK, as the Competition and Markets Authority (CMA) has blocked the deal over concerns about cloud gaming. As a result, the CMA has added more restrictions to both companies to prevent pre-emptive action and ensure a more competitive environment. Meanwhile, the UK government has announced “smarter regulation” to reduce red tape and regulatory burdens on businesses. Although Microsoft is preparing to appeal the CMA’s judgment, the impact of this proposal remains unclear.
New Restrictions Added to Microsoft and Activision Blizzard
In an interim order, the CMA has added new restrictions to Microsoft and Activision Blizzard to prevent pre-emptive action and ensure a more competitive environment. According to the new restrictions, the two companies will need to secure prior written consent from the CMA if either company invests in the other’s development studios, acquires an interest in another business that holds an interest in the other company, or holds an option to acquire an interest in either of the mentioned examples.
UK Government Announces “Smarter Regulation” to Reduce Red Tape
The UK government has announced “smarter regulation” this week, aiming to reduce red tape for businesses and promote a more competitive environment. The government said it will remove unnecessary rules and regulations to ensure the rules and regulations for British businesses are proportionate and consider wider impacts on consumers, innovation, and competition, as well as direct costs.
Microsoft Preparing to Appeal CMA’s Judgment
Microsoft is preparing to appeal the CMA’s judgment, arguing that the regulator did not fully consider the facts of the case. Following the CMA’s decision, Microsoft has added high-level legal power to its team, including a lawyer who had previously represented Queen Elizabeth II, Boris Johnson, and Princess Diana.
European Union and US Federal Trade Commission Also Issued Complaints
The European Union and the US Federal Trade Commission have also raised concerns about Microsoft’s attempt to acquire Activision Blizzard. Last year, the European Union issued a formal anti-trust warning, and the US Federal Trade Commission issued a legal complaint.
Expert Weighs in on CMA’s Decision
Alden Abbott, the former General Counsel of the US Federal Trade Commission, has criticized the CMA’s decision to block the deal from proceeding. Abbott argues that the body did not fully consider the factual evidence when making its decision.
Conclusion
Microsoft is facing major regulatory hurdles in its attempt to acquire Activision Blizzard. The UK’s CMA has blocked the deal over concerns about cloud gaming and added restrictions to ensure a more competitive environment. Meanwhile, the UK government has announced “smarter regulation” to reduce red tape for businesses and foster innovation. As Microsoft prepares to appeal the CMA’s judgment, it remains to be seen what impact these developments will have on the future of the deal.
