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| 1 minute read

Microsoft (understandably) opts not to offer CMA commitments for Activision Blizzard acquisition

The CMA announced today that it has referred Microsoft's acquisition of Activision Blizzard to an in-depth 'phase II' investigation. This comes as no surprise following the conclusion reached in the CMA's phase I investigation that "if Microsoft buys Activision Blizzard it could harm rivals, including recent and future entrants into gaming, by refusing them access to Activision Blizzard games or providing access on much worse terms.

As I noted when the deal was announced, we already had a pretty good idea that competition authorities would want to investigate these kind of issues in detail. However, we now know, as my colleague Sophie has commented, that the CMA is also interested in investigating whether "Microsoft could leverage Activision Blizzard’s games together with Microsoft’s strength across console, cloud, and PC operating systems to damage competition in the nascent market for cloud gaming services." 

The CMA has already shown that it is interested in cloud gaming in other contexts. It announced earlier this year that it intended to launch a market investigation into the distribution of cloud gaming services through app stores on mobile devices (see my comment on that here). However, these concerns, that Microsoft might leverage its position across multiple different markets in order to affect the nascent cloud gaming services market, are considerably broader in scope. 

Given the breadth of the CMA's concerns, it isn't really a surprise that Microsoft hasn't offered any commitments. The concerns about access could be addressed - the debate there is likely to revolve around how long Microsoft should guarantee that games like Call of Duty will remain available on other consoles. However, it's difficult to see how it could offer anything in relation to cloud gaming that would satisfy the CMA at this stage. 

The European Commission is also likely to announce an investigation into this transaction in the near future. It will be interesting to see how its concerns compare to those raised by the CMA; to date it has not shown the same interest in cloud gaming.



competition law, technology, interactive entertainment