Microsoft reportedly expecting CMA to oppose ABK acquisition
UPDATE: Xbox firm says it has "not predetermined, nor been advised by its lawyers, that the merger will be blocked"
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Update, February 7, 2023: Microsoft has since corrected the New York Times, which has updated its article to say: "Microsoft said that it believes it has a strong case in Britain and it has not predetermined, nor been advised by its lawyers, that the merger will be blocked."
Original story, February 6, 2023: Following objections from the US Federal Trade Commission and the European Commission, Microsoft now expects the UK's Competition and Markets Authority to oppose its proposed acquisition of Activision Blizzard.
Sources told The New York Times, spotted by VGC, the Xbox firm's legal team expects the UK regulator will object to the merger.
They claim the company is currently preparing concessions for the European Union, which issued a formal complaint against the deal last week, in the hopes of convincing the EC to approve the acquisition – and it hopes the same concessions will win over the CMA as well.
The hope is that if both the EU and UK regulators approve the deal, it will be easier to reach an agreement with the FTC before the scheduled trial begins in an FTC administrative court this August.
The FTC issued a legal complaint against the deal in December. The New York Times noted the US government body would typically seek an injunction from a federal judge rahter than its own administrative court. It is believed the FTC took the latter court of action to set a precedent in the hopes the EU would follow suit.
The NYT reported that any of the three agencies could lean on the others to block the deal in the coming months.
The publication described this acquisition as the "biggest test yet of this new alignment between global antitrust enforcers."
Announced in January 2022, Microsoft's proposed acquisition of Activision Blizzard is being reviewed by officials and regulators in more than a dozen countries. Some territories – including Chile, Brazil, Serbia and Saudi Arabia – have already approved the deal.
However, the CMA, EC and FTC all said the merger required an in-depth investigation into the potential impact on competition. Concerns included the possibility of Microsoft making Call of Duty, and other ABK properties, exclusive to the Xbox ecosystem, as well as worries about competition in the cloud gaming and games subscription spaces.
Microsoft has attempted to address the former complaint several times, promising at least ten years of Call of Duty on Nintendo platforms and Steam, and offering the same on PlayStation – although Sony told GamesIndustry.biz the offer itself was "inadequate on many levels."
The European Commission is due to make its final decision by March 23, with the CMA issuing its own decision by April 26.
Microsoft and Activision Blizzard hope to complete the deal by the end of the former's current financial year, which ends on June 30.
You can read more about the regulatory hurdles Microsoft and Activision face, including the regulators' various concerns, in our extensive primer.
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