UK Narrows Its Focus In Microsoft/Activision Investigation

The Competition and Markets Authority (CMA) in the UK is investigating Microsoft’s proposed acquisition of Activision Blizzard, and has recently updated its provisional findings regarding the deal. While the EU has indicated that it will allow the deal to proceed, the CMA’s investigation is still ongoing.

The CMA has narrowed its focus to the impact on competition in the console market, and has provisionally ruled that the acquisition would not result in a substantial lessening of competition in console gaming in the UK. The CMA’s conclusion is based on new evidence it received in response to its original provisional findings, as well as a wide range of information gathered before those findings were issued.

However, the CMA still has concerns about Microsoft’s influence in the cloud gaming market. The addendum to the CMA’s provisional findings relates only to competition in the supply of consoles, and not to competition in the supply of cloud gaming services. The CMA is continuing to carefully consider the responses provided in relation to the original provisional findings. The CMA’s final report is due to be issued by 26 April 2023.

The CMA’s chair, Martin Coleman, stated that provisional findings are a key aspect of the merger process and are designed to give businesses involved, as well as interested third parties, the chance to respond with new evidence before a final decision is made. The CMA’s provisional view that this deal raises concerns in the cloud gaming market is not affected by the recent announcement.

While Microsoft’s deal is not yet finalized, the CMA’s provisional ruling is good news and keeps the deal alive. It remains to be seen how the CMA will rule on the impact on the cloud gaming market.