Microsoft (NASDAQ: MSFT) Faces Fresh Regulatory Hurdles in the UK
CIO Review Europe | Wednesday, January 18, 2023
Authorities in the US, the EU and the UK are all now investigating how the deal will affect competition in the games market.
FREMONT, CA:Regulators are scrutinising Microsoft's (NASDAQ: MSFT) proposed USD 68.7 billion acquisition of Activision Blizzard more closely. The Competition and Markets Authority (CMA), the UK regulatory agency that looks into any anti-competitive activity, has extended the deadline for its current probe a month after a US regulator requested a court to suspend the sale.
The CMA announced on January 5 that the phase two investigation's conclusion would now be published on April 26, 2023, rather than the UK regulator's original deadline of March 1, 2023. It stated that the investigation's breadth and complexity, as well as the need for more time to evaluate the huge volume of evidence, as well as main-party and third-party submissions, were the reasons for the extension's grant.
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Following its request for public feedback on the planned merger, the CMA said last month that it had received 2,100 emails, of which around three-quarters were generally favourable and about a quarter were generally unfavourable.
The CMA stated that it still hopes to finish the inquiry as soon as practicable and in advance of this date notwithstanding the prolongation. The CMA is anticipated to inform Microsoft and Activision Blizzard of its preliminary conclusions and any required corrective actions by the middle of February, following the new schedule. In February or March 2023, most likely, interested parties will have another chance to provide evidence or comments in response to the CMA's report on its preliminary conclusions. The final report will be released on April 26.
Investigations Around the World
Not only UK regulators are carefully examining this planned merger, but the US Federal Trade Commission (FTC) also sued to stop the acquisition in December 2022 due to worries about Microsoft's history of buying studios and making their games exclusive to the Xbox environment.
Microsoft has already demonstrated that it can and would withhold content from its gaming competitors, head of the FTC's Bureau of Competition, who was quoted at the time the lawsuit was filed. They fight to prevent Microsoft from acquiring a top independent game company and utilising it to undermine the gaming industry's competitiveness in several vibrant and quickly expanding markets.
Microsoft v. FTC cases is scheduled to start in August, after which FTC Administrative Law will decide on the deal's viability. Although this could take a while, James Weingarten, an attorney for the FTC, stated in a pre-trial hearing that there have been no substantive settlement discussions between the US government agency and Microsoft on the proposed merger.
The European Commission is currently conducting research for its investigation of the planned takeover elsewhere. According to Reuters, the European Commission sent a 91-page questionnaire to gaming businesses like publishers and developers earlier this month regarding the acquisition. The question asked whether the acquisition might cause publishers' games to cost more on rival consoles or delay their release on other platforms.
The Commission has until April 11, 2023, to decide on whether to approve the transaction.
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