The UK regulator blocks Microsoft’s acquisition of Activision Blizzard

The UK’s Competition and Markets Authority (CMA) has rejected Microsoft’s proposed $68.7 billion acquisition of Activision Blizzard, the world’s third-largest video game company. The CMA cited concerns over the potential impact on competition in the industry, as well as the potential for harm to consumers.

Microsoft announced its intention to acquire Activision Blizzard in January 2022, in what would have been the biggest deal in gaming history. The acquisition would have given Microsoft control of some of the most popular video game franchises in the world, including Call of Duty, World of Warcraft, and Candy Crush.

However, the CMA launched an investigation into the proposed acquisition in March 2022, citing concerns over competition in the video game market. The CMA expressed concerns that the acquisition would give Microsoft too much control over the industry, potentially leading to higher prices for consumers and less choice in the market.

In a statement released on April 25, 2023, the CMA announced its decision to block the acquisition. “We have concluded that the acquisition of Activision Blizzard by Microsoft would significantly reduce competition in the video game market, and we are not satisfied that the proposed remedies offered by Microsoft would be sufficient to address our concerns,” the statement read.

Microsoft has expressed disappointment with the CMA’s decision and announced that it plans to appeal. In a statement, Microsoft said, “We are disappointed with the CMA’s decision to block our proposed acquisition of Activision Blizzard. We believe that the acquisition would have been good for the gaming industry and for consumers, and we remain committed to finding a way to make it happen.”

Activision Blizzard, for its part, has also expressed disappointment with the CMA’s decision. In a statement, the company said, “We are disappointed that the CMA has blocked Microsoft’s proposed acquisition of Activision Blizzard. We believe that the acquisition would have been a positive step for our company and for the industry as a whole. We will continue to explore options for the future of our company.”

The CMA’s decision is a blow to Microsoft, which had hoped to bolster its presence in the gaming industry with the acquisition of Activision Blizzard. The decision also highlights the increasing scrutiny that technology companies face from regulators around the world, as concerns grow over their market dominance and the potential impact on consumers.

The CMA’s decision also raises questions about the future of Activision Blizzard, which has faced criticism over its handling of workplace harassment allegations in recent years. The company has been the subject of multiple lawsuits and investigations, and the acquisition by Microsoft was seen by some as a potential opportunity for a fresh start.

Overall, the CMA’s rejection of Microsoft’s proposed acquisition of Activision Blizzard is a significant setback for both companies. It remains to be seen whether Microsoft will be able to address the CMA’s concerns and revive its bid for the gaming giant, or whether it will have to explore other options to expand its presence in the video game market.