UK’s Competition and Markets Authority (CMA) is responsible for scrutinizing and preventing mergers and acquisitions that might adversely affect competition. In January 2022, Microsoft announced its goal to purchase Activision Blizzard, a leading global video game publisher.
The CMA has investigated the proposed acquisition, citing concerns that the deal could reduce competition and harm innovation in the UK video game industry. In April 2022, the CMA blocked the deal, citing concerns that it would lead to higher consumer prices and reduce choice in the video game market.
Microsoft and Activision Blizzard have abandoned their plans to merge, and Microsoft has said it will continue to focus on its existing gaming portfolio and explore other growth opportunities.
It is important to note that the CMA’s decision to block the Microsoft-Activation deal was specific to the UK market and that other regulatory bodies in other countries may take a different view and judgment on the acquisition.
Sarah Cardell, chief executive of the Competition and Markets Authority (CMA) – Britain’s antitrust regulator – has defended its decision to block Microsoft’s acquisition of ‘Call of Duty’-maker Activision Blizzard and said it was the right decision for the UK.
This comes after both companies said the decision sent the wrong message to the global technology industry.
The CMA on Wednesday blocked the deal, saying it could hurt competition in the nascent cloud gaming market.
Microsoft president Brad Smith said the decision had “shaken confidence in the UK tech industry” and was “probably our darkest day in Britain in four decades”.
“If the UK government wants to bring in investment, if it wants to create jobs (…) it’s the role of the CMA, the UK regulatory framework, this transaction and the message that the UK has just sent to the world,” he told BBC radio.
He says the EU is a better option to establish a business than the UK. This message is straightforward.
But Cardell said the regulator’s role was to ensure Britain had a competitive environment for businesses to grow and thrive.
“This is important for UK consumers and UK businesses, and it is to protect those UK consumers and UK businesses that the CMA is here,” he told BBC Radio.
Asked if the British government could cancel the bloc if it felt it was harmful to the country, he said the CMA acted independently and was responsible for its decision.
“The decision the CMA takes is an independent decision we reached based on an overall assessment of the deal’s impact on competition, and it is the right decision for the UK.
He said Britain did not act alone, noting that the US Federal Trade Commission is also suing to block the deal.