The UK Competition and Markets Authority (CMA) has just revealed a provisional verdict on the purchase of Activision Blizzard. As Microsoft expected, the regulator opposes the acquisition as it believes it may harm the industry by reducing market competition.
The CMA reached this conclusion after several months of investigation, but it is a provisional verdict. So the body proposed several adjustments to the agreement in order to balance the scales and be able to approve the multi-million dollar acquisition. One of the alternatives involves giving ground in terms of Call of Duty and its future.
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The CMA will not approve the purchase of Activision Blizzard without adjustments to the agreement
According to the details, the CMA met with executives from Microsoft and Activision Blizzard as part of its investigation. In addition, he analyzed a huge amount of company documents and sent a survey to important companies in order to give a verdict.
In the end, the agency concluded that the purchase may have a negative effect on the industry. He thinks Microsoft can reduce the competition with all the Activision Blizzard content. The reason? Officials think the tech giant will gain a lot of leverage in cloud gaming and could make important content exclusive on consoles. Of course, Call of Duty is one of the main concerns of the CMA.
“Xbox and PlayStation are in close competition with each other today, and access to the most important content, like Call of Duty, is a big part of that competition. Reducing this competition between Microsoft and Sony could result in all gamers seeing higher prices, reduced range, lower quality, and worse service on game consoles over time.
“Our job is to make sure UK players don’t get caught in the crossfire of global deals that, over time, could hurt competition and result in higher prices, less choice or less innovation. Tentatively, we have found that this may be the case here,” the CMA stated.
What alternatives does the CMA offer to Microsoft?
The authorities gave several options to adjust the agreement and thus be able to approve it without any objection. His main idea is a divestment, that is, a reduction of Activision Blizzard’s assets that could translate into several scenarios. One of the most striking would force Microsoft to sell the part of the business linked to Call of Duty.
“At this stage, the CMA has identified the following potential structural remedies. Require a partial divestiture of Activision Blizzard, Inc. This may include:
Divest from the Call of Duty-related business Divest from the Activision segment of Activision Blizzard, Inc., which would include the Call of Duty-related business Divest from the Activision segment and the Blizzard segment of Activision Blizzard, Inc., which would include the Call of Duty-related business of Duty and World of Warcraft, among other titles”.
The final alternative would be to completely oppose the deal and block the acquisition. The body will present its final verdict before April 26. To do this, he requested a response to the demands before February 22 and a response to his provisional verdict by March 1.
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Find all the news related to the purchase of Activision Blizzard at this link.
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