Microsoft’s billion-dollar deal with Activision is decided in London

Several regulators are reviewing Microsoft’s billion-euro deal. But at the end of the day, the British CMA seems to be deciding whether Activision and thus also “Call of Duty” will move in with the software giant.

Microsoft is exercising confidence: For more than a year it has been waiting for antitrust authorities in the USA and Europe to agree to the Activision deal. It’s the biggest deal in gaming history. After all, Microsoft is willing to pay more than 70 billion dollars for the game manufacturer Activision Blizzard and thus also receive the licenses for “Call of Duty” and “Candy Crush”. Whether the deal will become something else is decided in London, not in Brussels or Washington.

The billion-dollar deal has fallen out of favor with regulators. The fact that Microsoft is adding blockbusters like ‘Call of Duty’ to its line of business, which already includes the Xbox console, the ‘Halo’ series and ‘Minecraft’, has authorities concerned that Microsoft could make it harder for competing platforms to unhindered Gain access to Activision’s most popular titles. The argument that Microsoft hasn’t had a monopoly in the gaming industry for a long time goes unheard. The British Competition and Markets Authority (CMA) announced in August last year that it was investigating the billion-euro deal. And this investigation result will be decisive for the takeover plans.

“The CMA’s ruling is critical because if it decides to block the transaction, the companies have little recourse,” said Jennifer Rie, an analyst at Bloomberg Intelligence. Because British courts would rarely overturn a merger decision by the CMA. “The terms have to be thorough and go beyond the licenses for Call of Duty,” she says. An unconditional release of the 70 billion deal is unlikely.

CMA steps out of the shadow of the European Commission

After Brexit, the CMA stepped out of the shadow of the European Commission. Since Meta (Facebook) had to reverse the takeover deal with Giphy, large companies have feared the authority’s decision. Rightly so, according to Anne C. Witt, Professor of Law at the EDHEC Business School, because it is quite likely that the FTC (Federal Trade Commission) in the USA could refer to the CMA in its decision.

When asked about the European Commission, Witt assumes that it will only play a subordinate role. Although there have already been informal talks about possible remedial measures, a decision is still a long way off: “The European Commission has just sent out a statement of objections, so there is no way it can reach its goal before the CMA. The CMA will do this win the case and it will be interesting,” Witt is convinced.

CMA is expected to report results soon

The CMA is expected to release preliminary results in the next few days, which will indicate whether it intends to block the deal or authorize a sale with specific, strict remedies. Microsoft remains confident. The company has no other options with regard to the CMA because, unlike the European Commission, there were no discussions with the British authority. However, the CMA’s updated guidance from last year now allows companies to propose possible remedial actions ahead of the tentative decision.