UK Watchdog Asks For Public Comments on Microsoft’s $69B Deal

“Microsoft says the deal should be revisited given legally-binding commitments to the European Commission and a licensing deal with Sony,” states Microsoft’s subsidiary. This acquisition is now significantly different due to the concessions Microsoft committed to, such as agreements with NVIDIA, Boosteroid, and Ubitus to license Activision games for a decade after the merger, all in order to improve competition in the cloud gaming market, reported Reuters. 

Microsoft is also defending the validity of the takeover by arguing that there are special reasons why the regulator should not impose a final order to prohibit the deal, with Microsoft warning that any breach of its commitments would result in European approval no longer being valid, putting Microsoft at risk of fines up to 10% of its worldwide turnover.

The most significant part of the new argument pertains to the alleged Call of Duty agreement with PlayStation that could grant the game console exclusive use of the Activision title for the next decade. The Competition Appeal Tribunal (CAT) in London has accompanied the argument as evidence to support the justification of the changes in scenario to approve the biggest gaming acquisition in history.

Related: Microsoft Faces Antitrust Probe in EU over Bundling Teams

Microsoft is now seeking to gain approval with such changes in circumstance, while the CMA is now seeking further input from potential industries, members of the public, and stakeholders before announcing their final decision. Time is ticking, as the deadline is set for August 29th.

Taking a closer look at the situation, the CMA’s original rejection of the Microsoft’s Activision Blizzard deal was due to the realistic threat of the tech giant using the gaming provider’s portfolio to acquire an unfair advantage in the fast-growing game streaming industry. Microsoft has attempted to alleviate the CMA’s concerns by providing concessions such as the EU license offer allowing any EU citizen the right to stream any Activision Blizzard title via services rivaling Xbox Cloud Gaming, as well as the agreement with PlayStation protecting Call of Duty exclusivity on the platform for the next decade.

Critics, however, are sceptical of the deal going through as the EU license agreement only carries an expiration duration of a decade, the Call of Duty protection on PlayStation being the sole safeguard of Microsoft not taking advantage of the Activision Blizzard franchise, and the CMA previously dismissing Microsoft’s proposal of remedies on account of them all having expiration dates associated with them.

It remains to be seen if the CMA, who already demonstrated a willingness to reach a Microsoft/Activision Blizzard approval agreement, allows the merger to take place with the current changes in scenario, the deadline having already been extended to October 18th.

“The UK’s Competition and Markets Authority is seeking more input on Microsoft’s proposed acquisition of Activision Blizzard,” states the British regulator. “The CMA is now soliciting additional feedback from gaming industry participants before it forms its own opinion on whether Microsoft’s newly reported changes in circumstances are notable enough to warrant an approval of the contested transaction.”

For now, it is up to the public to decide whether the biggest gaming deal in history should go ahead. The public consultation is now open, and the CMA is willing to receive comment before giving their final decision before the end date of August 29th.

Source: Reuters