How Microsoft is addressing antitrust concerns over Activision deal (The Economic Times)
The recent decision by regulators to prevent Microsoft from acquiring gaming business Activision Blizzard could, according to some industry analysts, result in a greater selection of games being made available to gamers.
According to the UK’s antitrust regulator, the purchase would have a negative impact on competition in the cloud gaming industry. Concerns are developing that large-scale mergers in the technology industry could have an effect on users all over the world.
Anat Alon-Beck, a business law professor at Case Western Reserve University, told Lifewire in an email interview that the United States Federal Trade Commission has authorized an administrative complaint against the proposed merger between Microsoft Corporation and Activision Blizzard, Inc., a video game developer. “Even here in the USA,” Alon-Beck said. “The United States Federal Trade Commission.”
It is important to keep in mind that in addition to selling the Xbox gaming system, Microsoft also provides a video game subscription service known as Xbox Game Pass in addition to a cloud-based video game streaming service. If the transaction is finalized, Microsoft will have the ability to eliminate competitors to its Xbox gaming devices as well as its rapidly expanding subscription and cloud-gaming business.
In January 2022, Microsoft made an offer of $68.7 billion to acquire Activision, which is recognized as one of the most successful video game producers in the world. The government of the United Kingdom initiated an investigation, which revealed that the combination has the potential to enhance Microsoft’s position in cloud gaming and reduce the amount of competition in this rapidly expanding market.
Also read: Microsoft’s Activision Blizzard deal blocked by UK regulators
According to a statement issued by the United Kingdom government in a news release, “Microsoft already enjoys a powerful position and head start over other competitors in cloud gaming,” and this agreement would extend that advantage by giving Microsoft the potential to undermine new and innovative competitors.
The Competition and Markets Authority (CMA) stated that Microsoft’s promise to provide major cloud gaming platforms with access to the multi-billion dollar Call of Duty franchise owned by Activision would not be a viable means of resolving its concerns in this matter.
The Competition and Markets Authority (CMA) is the first of the three authorities to make a decision regarding the proposed transaction, which also requires approval from the United States of America and the European Union. The organization in the UK stated that it did not have any concerns about the possibility of the arrangement distorting competition in the market for console gaming.
Both Microsoft and Activision Blizzard expressed their disagreement with the ruling and stated that they will file an appeal. The popular video games Call of Duty, World of Warcraft, and Candy Crush are all produced by Activision Blizzard.