Competition Watchdog to Review Microsoft’s Revised Proposal for Activision Blizzard Takeover

The competition watchdog has decided to consider a revised proposal from Microsoft in its pursuit of a $69 billion takeover of Activision Blizzard.

Microsoft’s original plan for the acquisition has been deemed unfeasible by the regulator. However, the tech giant has now submitted a new version of the deal for review by the Competition and Markets Authority (CMA).

In this updated proposal, Microsoft commits to selling off its rights to provide cloud-based gaming services for Activision PC and console games outside the European Economic Area (EEA) for the next 15 years.

These rights would be transferred to Ubisoft, a rival game developer known for popular series like Assassin’s Creed and Far Cry.

The objective of this arrangement is to ensure that players can access Activision Blizzard’s games on consoles and computers not affiliated with Microsoft.

The CMA will initiate a new phase of investigation, known as Phase 1, into this revised deal.

The CEO of CMA, Sarah Cardell, made it clear that the review does not signify approval, stating, “This is not a green light.”

The focus will be on evaluating the details and potential competitive impacts of the restructured agreement, taking into account third-party input.

Microsoft’s President, Brad Smith, elaborated on the changes brought about by the revised deal.

He stated that Microsoft will no longer have the exclusive right to release Activision Blizzard games solely on its Xbox Cloud Gaming platform, nor will it have exclusive control over the licensing terms for these games on competing services.

This development introduces a new dimension to the case, which is already the most significant undertaking by the CMA since it gained post-Brexit regulatory powers.

Initially, it appeared that the matter might end up in court. Microsoft’s initial announcement of its intention to acquire Activision Blizzard came in January 2022, a move that would have previously fallen under the jurisdiction of EU regulators.

However, with Brexit, the CMA now has the authority to independently investigate such large-scale deals. Given that both companies have substantial operations in the UK, the outcome of their merger could substantially impact competition in the country.