Microsoft Faces UK Regulatory Hurdle in Activision Blizzard Acquisition

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UK Regulator Challenges Microsoft's Activision Blizzard Takeover. The UK's Competition and Markets Authority (CMA) has voiced its opposition to Microsoft's proposed acquisition of Activision Blizzard, delivering a significant blow to the tech giant's plans. 

The regulator asserts that this merger could severely undermine competition in the region's cloud gaming industry, potentially limiting innovation and choices for British gamers. Microsoft, which had been awaiting the CMA's approval while in the final steps of its acquisition strategy, has expressed its intention to appeal the decision. The company has also pledged to make popular games, such as Call of Duty, accessible on multiple platforms not owned by Microsoft.

Activision Blizzard's CEO, Bobby Kotick, confirmed the company's commitment to support Microsoft in crafting their appeal. If the acquisition fails to secure approval by the July 18 deadline, Microsoft may face a massive penalty. Microsoft responded:

We remain fully committed to this acquisition and will appeal. The CMA's decision rejects a pragmatic path to address competition concerns and discourages technology innovation and investment in the United Kingdom. We have already signed contracts to make Activision Blizzard's popular games available on 150 million more devices, and we remain committed to reinforcing these agreements through regulatory remedies. We're especially disappointed that after lengthy deliberations, this decision appears to reflect a flawed understanding of this market and the way the relevant cloud technology actually works.

Meanwhile, Activision-Blizzard CEO Bobby Kotick in a company-wide e-mail, writes:


Today, the Competition and Markets Authority (CMA), a regulatory agency in the U.K., decided not to approve our merger with Microsoft. This isn't the news we wanted—but it is far from the final word on this deal.

Alongside Microsoft, we can and will contest this decision, and we've already begun the work to appeal to the U.K. Competition Appeals Tribunal. We're confident in our case because the facts are on our side: this deal is good for competition.

The U.K. hopes to grow its leadership position in technology, and a combined Microsoft-Activision would accomplish exactly that. At a time when the fields of machine learning and artificial intelligence are thriving, we know the U.K. market would benefit from Microsoft's bench strength in both domains, as well as our ability to put those technologies to use immediately. By contrast, if the CMA's decision holds, it would stifle investment, competition, and job creation throughout the U.K. gaming industry.

This merger is a complex process, and I know I'm not the only one frustrated by the hurdles and delays. We're accustomed to a company culture that moves quickly to accomplish big goals, so it's tough when we can't close things out at our usual energetic pace. We'll keep pressing our case, because we know that this merger will benefit our employees, the broader U.K. tech workforce, and players around the world.

I'm going to do everything I personally can to advocate for us and help regulators understand the competitive dynamics in our industry. What gives me confidence is that, whether on our own or united with another company, we are one of the strongest companies in our industry, poised for continued growth, and building on our incredible IP.

I appreciate your continued hard work and focus, and for continuing to connect and engage our players around the world. This is the best time to be in our field, and you all represent the best of our industry. We'll be sure to keep you updated on next steps as they happen.

With appreciation,

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