Report: Microsoft expects UK to block Activision merger deal [Updated]


Microsoft is reportedly expecting UK regulators, the Competition and Markets Authority (CMA), to oppose its acquisition of Activision Blizzard, according to report from The New York Times.
“Microsoft’s legal team also expects the antitrust authority in Britain to oppose the transaction,” reads the report.
European Union regulators have issued a formal antitrust warning to Microsoft over its Activision Blizzard acquisition, however, Microsoft is committed to “finding a path forward” and is “confident” it will be address the concerns from the European Union regulators.
Even if Microsoft is able to get the European Union and UK regulators to approve the deal, an approval is still needed by the Federal Trade Commission (FTC) in the US. The FTC in December announced it was looking to sue to block Microsoft’s acquisition of Activision Blizzard as it would give Microsoft the ability to suppress its competitors in gaming.
Chile’s regulatory authority, the Fiscalia Nacional Economica, in December 2022 released its ruling on Microsoft’s Activision Blizzard acquisition and has voted to approve the deal in Phase 1. The acquisition has also been confirmed to have been approved in Brazil, Saudi Arabia, and Serbia unconditionally.


As reports previously suggested it would, the European Commission — the governmental executive of the European Union — has sent a “statement of objections” to Microsoft, outlining its formal opposition to the tech company’s acquisition of Activision Blizzard. That’s according to a Feb. 1 report from Politico. This concludes the Commission’s investigation into the deal, but it also serves as a prelude to negotiations with Microsoft, which may be willing to offer concessions to gain the EU’s eventual approval. “We are listening carefully to the European Commission’s concerns and are confident we can address them,” a Microsoft spokesperson told Politico.
Meanwhile, a Feb. 4 piece in The New York Times reports that Microsoft’s legal team expects the U.K. Competition and Markets Authority to oppose the deal, which is certainly consistent with the CMA’s initial stated concerns. (In a statement to the Times, Microsoft said that it believes it has a strong case in Britain and it has not predetermined, nor been advised by its lawyers, that the merger will be blocked.) Microsoft’s lawyers reportedly think the EU will be the most open to remedies of the three main regulators; if they can strike an agreement there, the thinking goes, it will be easier to talk the FTC and CMA into accepting the deal with compromises. Still, with all three regulators seeming closely aligned, Microsoft faces an uphill battle to get its acquisition through.


According to Axios’ Stephen Totilo, Microsoft subpoenaed Sony on Jan. 17, asking it to hand over internal information to help it build its defense against the lawsuit the Federal Trade Commission is bringing against its acquisition of Activision Blizzard.
Given the extent to which the FTC’s case, along with other regulators’ concerns, rest on Sony’s complaints that its competitive position will be weakened by its console rival acquiring Call of Duty and other Activision Blizzard games, it seems likely that Microsoft wants some internal data that will help them dispute this claim — perhaps Sony’s release or development schedule, or some sales or engagement data. Sony, for its part, will try to limit how much sensitive information it has to share with its competitor, but by pushing so hard for regulators to block the deal, it did open itself up to this kind of exposure.


According to Bloomberg, Google and Nvidia have both echoed Sony in expressing their concerns to the FTC about the potential of the merger to squash competition, strengthening the regulator’s case as it prepares to bring it before the courts in August.
Neither is as direct a competitor to Microsoft in gaming as Sony is, but both have some overlap. Nvidia’s main business is manufacturing graphics cards, but it also has a streaming service, GeForce Now, that is perhaps the closest competitor to Microsoft’s Cloud Gaming initiative. (GeForce Now does not seem to currently carry any major Activision Blizzard games.) Nvidia reportedly does not directly oppose the deal, but stressed the need for open and equal access to Activision Blizzard’s games.
Google’s own streaming service, Stadia, is about to shut down. But the company has a big interest in mobile gaming via its Google Play store and Android operating system, and acquiring mobile behemoth King (Candy Crush) as part of the Activision Blizzard deal will make Microsoft a much bigger player in the space. Most likely, its complaint is just one tech giant trying to curb the influence of another.

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Olivia Wilson
By Olivia Wilson


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