
With the European Commission’s decision to pass Microsoft’s unprecedented $69 billion buyout of Activision Blizzard today, it was inevitable that the UK’s Competition and Markets Authority would be asked to comment. Unsurprisingly, the division – which made the unexpected move to block the acquisition a few weeks ago – had an oven-ready response ready to run.
In its statement, it pointed out that the US, UK, and Europe are “unanimous” that the buyout will affect competition in the cloud gaming sector, but it noted that it won’t accept the same remedies as the EC has allowed. Microsoft has agreed to enable players to stream all current and future Activision Blizzard titles they own on rival cloud services for a period of ten years.
“The UK, US, and European competition authorities are unanimous that this merger would harm competition in cloud gaming,” a spokesperson for the CMA said. “The CMA concluded that cloud gaming needs to continue as a free, competitive market to drive innovation and choice in this rapidly evolving sector.”
It continued: “Microsoft’s proposals, accepted by the EC today, would allow Microsoft to set the terms and conditions for this market for the next ten years. They would replace a free, open and competitive market with one subject to ongoing regulation of the games Microsoft sells, the platforms to which it sells them, and the conditions of sale. This is one of the reasons the CMA's independent panel group rejected Microsoft's proposals and prevented this deal.”
It concluded: “While we recognise and respect that the EC is entitled to take a different view, the CMA stands by its decision.”
The next steps for Microsoft are tedious and will extend the timeline of this saga by many months. First, it may need to renegotiate the terms of the deal with Activision Blizzard, as the timeline for its expected closure is now likely to run far beyond its originally expected completion date of July. Should it proceed with that, it’ll then need to take its case to the Competition Appeal Tribunal, who will in turn determine whether the CMA needs to conduct a second review of the situation. Microsoft has already attempted to put political pressure on the UK government, arguing that the CMA’s decision proves the “European Union is a more attractive place to start a business than the UK”.
In the meantime, the United States’ Federal Trade Commission is still opposing the deal, and will need to be beaten in court. All of this, of course, means the story is set to run and run and run – potentially into 2024 and beyond. That is, of course, assuming Microsoft and Activision Blizzard do decide to persevere, and we should get more clarity on that later this summer.
[source twitter.com]
Comments 85
People launching an attack on the UK in 3....2....1.....
Dance battle to decide who wins?
The deal can go ahead regardless of the stance of the UK, @RonnieL. All it means is that the UK will not get the same level of service as the rest of the World. So, for example, games will not be able to be streamed via the Cloud in the UK, but be can literally everywhere else. The CMA cannot block the deal, they can only limit what happens within the UK...
@Fiendish-Beaver This isn't accurate. If the CMA's decision remains unchanged then Microsoft would have to withdraw their entire business from the UK in order to close the deal, which is not happening.
Care to explain, @get2sammyb? That is my understanding.
I cannot find it right now, but I read an article by a lawyer explaining the remedies available to Microsoft, and that was my understanding...
@theMEGAniggle This but it's Jim Ryan and Phil Spencer
I can see the UK becoming irrelevant in the future.
I don't think the world would miss us if we disappeared.
The CMA is independent of the Government, @PenguinLtd. I believe the CMA is being grilled by the Government tomorrow though...
"The CMA stands by its decision."
As it should. The CMA is the only regulator that got it right so far. All these regulators are stupid if they just let megacorporations keep consolidating everything.
Yes, it does sound very strange, this - “it will harm competition, but as long as it isn’t a problem for 10 years we don’t care”.
It does feel a bit like we’re overestimating our position in the world. As a market, the UK just doesn’t compare to most world economies. I honestly wouldn’t be surprised if Xbox pulled out of the UK to facilitate this deal, we’re probably worth less to them than ActiBlizz are.
And it entirely depends on which side of the fence you are sitting as to whether you agree or disagree that the Government is interfering with the running of the BBC, @PenguinLtd. It doesn't matter who is in Government, the Opposition always claim that the other side is interfering, yet rarely is it ever actually proven...
The days of the British Empire are long gone. The UK is irrelevant and the purchase will happen.
@Fiendish-Beaver You are correct @get2sammyb couldn't be more wrong. They definitely would not have to remove their entire business. Regulatory authorities generally aim to encourage competition and protect consumers, not to drive companies out of business or out of specific markets. A remedy Microsoft could do is not offer any Activision content on their cloud gaming service to consumers in the UK. Obviously this isn't the thing they would want to do, but they could.
Just keep it the way it is with 3rd party access being guaranteed to everybody with no if and buts lingering in the background in the years to come. if MS wants games for it's service then that's on them to stepup to the plate via their 20+ something studios instead of trying to disrupt and persuade Markets into Cloud gaming where the infrastructure right across the world simply isn't there and wont be for many many years..by that time Native gaming on handhelds will be viable more than ever anyway
@brackfribunduru Do you have a source for this because it's contrary to everything I've read on the subject?
The deal is block with the CMA and FTC both standing strong against it.
@Heavy_Artilery If you hate the British so much, why are you on a British web site?
With the UK government grilling the CMA tomorrow, and the PMs comments about mergers encouraging uk growth, it will be interesting to see if ABK is mentioned.
Rishi Sunak keeps talking a big game about investment and jobs in the UK, but there will be far less if the CMA blocks mergers based on nascent markets such as cloud gaming. The PM talks a good game, but authorities have knee capped him completely. The EU looks far friendlier to business and investment at the minute
@get2sammyb As far as I understand it, they would not have to withdraw the entire business from the UK. They (specifically ABK) would have to spin off all UK operations into independent entities. Currently that consists of multiple publishing operations and a support studio for Sledgehammer.
ABK would then stop publishing in the UK directly and all UK publishing would be done via this entity. This entity would likely also hold all local trademarks (or whatever the equivalent of that is in the UK) and regional publishing rights for ABK IP.
Only at that point can the deal go forward without CMA approval (this entity would not be part of the deal.)
This independent entity would have to be structured in such a way that they are not controlled by the old-parent ABK, but likely would still be bound by the acquisition agreement should legal roadblocks be cleared.
MS would continue their appeal to determine if they can ever acquire these regional operations.
If never approved, this entity likely would continue to exist in its own, and make all regional publishing calls. MS adding ABK games into GamePass on the region would be subject of MS negotiating with the entity, for example.
Edit:
All through this process, existing parent Microsoft operations in the region would not be affected.
The logic behind all of this is that the UK only had control over acquisition of regional assets, if those are not part of the deal, there is little they can do about it.
Edit 2:
This is not a trivial/overnight process and I’m sure ABK neither MS would want to go there until they exhaust all legal options, although I heard from some experts that MS is likely to just push for this tactic as they wait for the appeal to clear. I just feel in my gut they would go there only after they see what their outlook is for that appeal, not before.
Basically no Activision/Blizzard on gamepass in the UK. Wonder how many people this is going to trigger
@Tharsman I've seen the situation proposed and shot down several times, but happy to be corrected if I'm wrong.
My understanding is that, as part of the acquisition terms, both Microsoft and Activision accepted they would need approval from several key regulators, including the CMA. To proceed without that approval is in direct opposition to the obligations of the deal.
I'll look into more. Appreciate your comment, though!
@get2sammyb it’s tricky to know without actually seeing what is in writing, but technically what I describe above is, as far as the region legality cares, abiding by the deal, as it results in no deal within the region.
I highly doubt they signed a blanket global deal blockage clause simply given how they publicly stated they will go through even if the FTC does not approve, and that’s the home turf. To me this reads as they will do all they can legally do to get the deal through.
The EU are a bunch of See You Next Tuesdays.
I agree with the CMA on this one.
After the ten year deal is up MS will change its stance without doubt. They knew full well they’d need an olive branch like this to get the deal over the line…
@XenonKnight It's a playstation website actually. If you want news about the uk go to gov.uk
Do any of these people in courts wearing suits making these decisions even play any video games. I'd bet the only games they've ever played is PC Solitaire or maybe Tetris on their kids Gameboy 30+ years ago. I don't think they even know what a trophy/achievement is
@Heavy_Artilery It's a UK/British Playstation web site. Why do you hate the British?
PlayStation LifeStyle is a not a UK/British Playstation web site.
@Beerheadgamer82 Gaming would be a lot better without collectibles, trophies and achievements
@XenonKnight I don't care if the site is Atlantean.
I respected the British Empire, but the UK is irrelevant. The deal will go through.
@Heavy_Artilery Then go play Nintendo they don't have it.
@XenonKnight Didn't Zelda have 1000 seeds or whatever to collect?
@Heavy_Artilery No one is forcing you to get the seeds. Nintendo doesn't care if you get them or not.
@Heavy_Artilery each to their own. I like the challenges they can sometimes offer, meaning getting more out of my moneys. Before trophies existed I'd complete the story and be done with it. Recently released Burning shores dlc a perfect example of this, around 10 hours getting all its trophies but not bothering with its trophies you'll be done within 4 or 5 hours, even less if don't bother with the gold trophy for doing all missions which includes the few side missions. Trophies can be a good way of seeing and doing everything a game has to offer, like an incentive to do more on a game your already enjoying. Even if you don't care for digital gongs, wouldn't it be nice to have that option to have a go at a games trophy list especially when it's a game you are super into
@Beerheadgamer82 @XenonKnight Maybe I was lucky enough to play AC 1 at a very young age. The flags in that game were so obviously there to waste your time that I have hated all sorts of collectibles ever since. It has saved me hundreds of hours of doing crap over the years. Sad that you 2 are obsessed with them. Think of what you could have achieved with that time.
The audacity for them to tell another regulator they are wrong lol
Ultimately I think they will get it through in the UK. One way or another.
@Heavy_Artilery or you could look for the trophies/achievements that might be a fun challenge for you to have a go at while ignoring collectables trophies. Not every single games platinum has a ludicrous amounts of collectables. New game plus trophies if done right can be a fun challenge and a way of enjoying a game even more. Trophies can = more bang for your buck. Do agree collectable trophies can be tedious at times though. Time spent on gaming I always treasure regardless of what I'm doing in any game because I'm a gamer. And I touch grass or walk past grass almost daily in the real world too ha
@Fiendish-Beaver lawyers lie and say incorrect things.
@Heavy_Artilery the UK isn't irrelevant. I'm American and love coming to this site. I wake up early so a site like this post news before American sites. Maturing isn't a bad thing.
Great that it's being blocked still as alot more needs to be done on this ,you can't just give Microsoft what they want at the drop of a hat,we will see what happens in the future but at the moment I'm very pleased it's not going through Any time soon I personally don't trust Microsoft at the minute ,half the time they've got way more money than sense it seems
And just to say it's not because Microsoft are from the usa ,they could be from anywhere on this planet and I'd still have reservations bout this
Of course the EU passed it.
They are very short sighted and have been.
They have no idea. All they see is money.
@Cutmastavictory well said. I love seeing Americans reacting to British snacks on youtube and the other way around. Also there's a lot of great American gaming YouTube channels I'm subbed to. I like americas way with words too like alright is alrighty which I sometime use myself now. We might be a small nation in comparison to other larger countries but we certainly know how to hold our own when the chips are down. That British bulldog spirit will always remain. I think Forza is made in England?
I think that the head of the CMA should challenge Phil Spencer to a multiplayer game of CoD. Winner takes all.
@__jamiie Mark Cerny vs Phil Spencer would be a far better match up as Jimbo doesn't game apparently. Both Mark and Phil like to 100% some games too
There is nothing stopping anyone from starting a better Cloud Service.
A gaming cloud service would need to go to publishers and the like to get licensing for games to be played on said services. Those companies would need to go to Ubisoft, EA, Square Enix, or any other major publisher out there before games can just be added.
It's not like someone can just log into any existing cloud service and play whatever they want.
Microsoft is allowing its games to be on "rival" services. It would just control a certain amount of IPs that can be made available.
Just. Like. Any. Other. Publisher.
The CMA argument makes no sense to me.
@TheCollector316 The same CMA that allowed Billion Pound deals for Argos/Sainsburys, O2/Virgin Media or Dixons and Carphone Warehouse that lead to thousands of job losses in the UK and Ireland?
@get2sammyb "Activision accepted they would need approval from several key regulators, including the CMA. To proceed without that approval is in direct opposition to the obligations of the deal."
Let me tell you something about the good ole boy USA, where govt officials go on videotaped record saying "I want you to use my words against me." then soon thereafter go exactly against what they said. It's almost an inalienable right to be a hypocrite here. MS and Bobby Kotick have no shame, no morals, only greed. Their words mean nothing.
@GamingFan4Lyf MS already has nearly 70% of the cloud streaming market. They have spent billions building their infrastructure, money that didn't come from xbox or gaming. Who can compete with that?
Analysts predict the cloud market will be worth 14 billion by 2030.
The deal goes through today, they get COD, overwatch, candy crush(a massive cash cow) and WOW plus all the other IP. In 2033 they pull every single game and IP they own and make them only available through their service. Other services don't stand a chance, and there is your monopoly.
And don't forget they have said they want more acquisitions after this one.
As a gamer, that future doesn't look too bright to me.
@KaijuKaiser I mean... Tomorrow Is Not Promised. A lot can easily change in 10 years. These counties or Microsoft may not even be around in 10 years. You can't base a deal on what will happen in over 10 years.
Legal experts caution that it isn’t commonplace for the CMA’s decisions to be overturned, but it also isn’t unheard of..80% Cma won..20% losses..In the last 20 years or so..So either way Uphill struggle..
No wonder 52% of people in the UK wanted to leave the EU :-/ They(EU Law makers etc etc) are CLUELESS + Hopefully the US will block it because this would be bad news for all gamers in the end if Microsoft get their way :-/
So, we have one regulator who is too stupid and lazy to want to do their job and regulate the market, one who is stupid, powerless and wastes resources and taxpayer money on a fruitless campaign, and the rest of the world who sees the common sense that Microsoft has no intention to pull anything away from anyone, they've extended olive branches to various other companies, and they're the only ones who give a damn about investing in the technology that will help the industry grow beyond where they have been for the past 40 odd years.
We'll see who wins.
Let's call the CMA's decision what it really was. Assisting SONY remain the dominant player in video games. They just needed any excuse for it. You guys won't lose any games, Sony will still make Activision's money, they'll just have a new master. Get used to it. Oh, and thanks for helping MS fund Game Pass.
BTW, I don't care what you're going to reply to me with.
I say MS should go through with it, and tell the CMA to stick it. Also, pressure the hell out of their citizens to make the CMA acquire sense. Everyone else will have a ton of new games on cloud but the UK.
Womp womp. Thanks again.
If you need to put political pressure on an entity in order to get the thing you want, chances are the thing you want isn't as harmless and friendly as you imply it is.
CMA with some brains unlike the rest, you love to see it.
@YonkoBuggyTheClown your funny, I like you. I suppose as an xbox super fan you need a good sense of humour.
@Serialsid and lose dollars in potential licensing revenue by making it exclusive to their services? I don't see it happening.
I think Microsoft will renew licenses. Microsoft is looking beyond a single box. Microsoft wants that money from everyone and everywhere it can.
Gating back to only Game Pass PC/console is economic suicide.
Wait, the drama of Microsoft is still not over yet?
I think the whole situation looks more like telenovela situation. 😏
@GamingFan4Lyf yes and in the streaming market they will be the dominant leader, by a massive margin! They will have the best infrastructure, the biggest IPs and the biggest marketing.
How is it going to be economic suicide to make people have to subscribe to their service if they want to play all their favourite games after taking them off all the others?
Streaming will be the future, like it or not. No need for console or pc. Hundreds of millions subscribing to MS because they have the monopoly. The licencing revenue would be nothing compared to the billions they will make from subscribers. Especially after they start wacking the price up.
And when they have the dominant streaming service they can then dictate to other publishers how much cut they want for the privilege to be on their platform. They will make steam look nice by comparison.
@Serialsid You have to, being an Xbox fan. Even I know they suck.
I chose to get an XB1 before a PS4, and I paid the price for that by having the bulk of my digital library on a wack console. I also got the SX before the 5. Sunk costs and all that.
I use them both.
PS fans need to get a sense of humor. Their games reflect their company and their gamers. Too arrogant and serious.
@Heavy_Artilery
Dude they have four nuclear ballistic missile submarines.
They aren’t the British Empire anymore, but they still have influence around the world.
@OrtadragoonX Yeah they are a nice little foot soldier for the US. Better than nothing. Better than most Nato countries, but that's not a high bar.
@Heavy_Artilery
As an American I see them as close Allies. We share a language, significant pieces of culture, a shared history.
They also have a decent navy. Their army needs some work but their navy is pretty good and slots in nicely alongside American fleets. Same with the French Navy.
@OrtadragoonX Nice little foot soldiers for the US. Little scamps
@Heavy_Artilery
The British and the French pull their weight.
A lot of European countries don’t do that in regards to NATO responsibilities.
@TheCollector316 well said sir!
I really wish there was some in-depth predictions on what'd happen.
Like what happens if the US and EU approve but the UK sticks with it's decision?
What happens if the US don't reach a decision by the deadline? I know ActiBlizz gets 3 billion but do they refile the merger or is that impossible?
This stuff fascinates me, I want to have all the information about it I can get.
TBH, I'm bored of COD. It's just a "Meh" game to me. The formula is old and tiresome IMO.
@Serialsid I mean, Microsoft invested in it. They didn't make it a requirement (like Stadia and others that failed).
Sony only uses cloud for PS3 games.
Nintendo doesn't do it at all.
Microsoft is market leader simply because...it's the only one who did it in a way that made sense. It succeeded where everyone failed.
It's not like it just bought everyone off to cease simply because Microsoft wanted it to. Microsoft took the time to understand why those others failed and made it an option as part of Game Pass Ultimate.
If Sony or Nintendo came in and added a streaming option to PlayStation Plus/Nintendo Switch Online to include its current first-party games on PC's, tablets, mobile, etc., it would be a huge hit just due to the quality of the library of games available!
But Sony and Nintendo don't want to do that because it's not how Sony or Nintendo want to form the narrative around PlayStation/Nintendo. Those two want to sell consoles.
That's not Microsoft's fault and it has nothing to do with Sony or Nintendo's ability to compete.
It's economic suicide because one has to assume people will even want to migrate to Microsoft's ecosystem. Do you see people ditching Sony or Nintendo for cloud versions of Crash Bandicoot? Diablo?
People will definitely not play CoD via Cloud Streaming.
Gaming is such a different beast than Netflix or Hulu. Gamers will never accept a "cloud-only" future.
So, yeah, it wouldn't be economically sound to gate everything into Microsoft's ecosystem because Microsoft already knows people won't jump ship "just because of game [x]"
Jeez they act like microsoft was planning to buy fifa or something.
So, doing my research into the Competition Appeals Tribunal. It's relatively new so there just isn't that much in the way of decisions.
On the one hand, I think people are overstating the difficulty of appealing to the CAT. The reality is that it's fairly new and there just aren't that many cases. So, low sample size means there's a lot of room for surprises.
On the other hand, it is incorrect to assume that the CAT will be more open to MS's position than the CMA. On some key cases, it has remanded the CMA's decisions for being too open to accepting remedies.
But the horrible reality is this: between the CMA and the FTC, this whole debacle is going to take YEARS.
So the UK and the United States are opposed to the deal, but the EU passed it... So what happens now? The European people get Microsoft games, and the British and American citizens don't? Or am I missing something here? (Who's position takes and has preference/precidence?) (Or am I missing something here?)!
@heavensdenon UK, US, and EU are the three commissions that need to win approval. Other commissions are not sufficiently large enough markets to influence the decision.
FTC opposes the deal, but they have to prove in court that the merger harms competition, which is really hard to do. FTC is trying to stall indefinitely. CMA blocks the deal, but an appeals process will happen. EU passed the deal.
Theoretically, the merger could go through without the UK, but it will probably be a logistical nightmare.
The only thing that's certain is that nothing is going to happen for a very long time. The legal process is extremely slow. If MS does manage to get the merger approved, don't be surprised if the PS6 and Xbox successor are about to come out.
@YonkoBuggyTheClown haha that made me laugh. Actually I agree with you... It's good to see a fair reasonable assessment of the situation, as opposed to the fan-boy/troll polemics which too often frequent the internet, or worse still the media (which act like they are snow white oblivious to the nuances of the situation), or worse still the courts?!
@patronmacabre Ok but what about the other big players, Apple and Google? Or are they simply sitting on the fence? (Actually I did hear that the owner of Microsoft and Sony is now the same entity) So yes, I'm going to be interested to see what happens. Sure Sony have outsold the Xbox by a ratio of 2:1, but I must say I am really happy with my Series X. It is such a monster, with regards to power and graphics. It will be a shame to see Microsoft go out of business and suffer, because of one silly legal decision!?
Just let Microsoft blow the $70 billion on toxic Activision. If they don't get it there's way too many other studios that they'll spend that money on. Those deals will be a hell of a lot easier to clear as well. You people that think blocking this really think Microsoft will pocket that $67 billion they'll get back and do nothing with it?
@heavensdenon Xbox is doing fine and they have the backing of a 2 trillion dollar company.
I'm not sure where you heard that Microsoft and Sony are owned by the same entity — one is an American company and the other is a Japanese company. Maybe you mean overlap of executives?
While Xbox will be fine, the same can't really necessarily be said for Activision. It's very likely that they put a lot of stake into getting acquired and probably didn't plan to be stuck in legal limbo for what will probably be several years.
@patronmacabre I just read it online last year. That there had been a take over of the Sony shareholders/owners. Or some merger? Idk, maybe it was fake news??
@GamingFan4Lyf MS are the market leader because they saw the potential of cloud gaming/services and had the financial backing to create an amazing infrastructure! We're talking billions to create and operate. With Facebook they laid a 4000 mile transatlantic cable, they are doing that all over the world to link up their data centers. You think anyone else in the gaming landscape can afford to do that??
Microsoft are playing the long game, they are getting all their ducks in a row for the future. So they can dominate gaming like they do PC operating systems. They are spending these billions because they see the future and how they can control it.
We will have to agree to disagree, I think you're wrong about console hardware always being a thing. People will play COD on streaming because they won't have a choice. The generation growing up with gaming now won't care about hardware. They'll just click an app on their TV, grab their controller and off they go.
@BeerIsAwesome
EU doesn't like us because of Brexit
Biden doesn't like because he's part Irish
Commonwealth countries leaders want out
Africa doesn't like us because of our history
Russia wants to flood us like a James Bond villan.
Meghan Markle and her cult following
Just sayin', no one likes us 😅
@RonnieL 10,000 employees in the UK? No. All business lose staff but not via a third party merger approval which was clearly bad for completion in the UK.
I like all the console the same amount, but I don't like how the CMA do business.
@RonnieL We may think of ourselves as unqualified but that doesn't mean that they are inherently qualified. They have made bad decisions in the past that reduced competition and jobs in an already narrow UK retail market - that's all I am saying. Yes layoffs suck regardless but I'm talking about the CMA who make choices for competition in the UK. I would be saying exactly the same things if Sony or Nintendo was blocked from buying the same company.
@RonnieL I don't think it's wise to presume you are less qualified than someone based on perception - these are not doctors we are talking about here. You clearly don't like MS that's fine. They are all corps who just want our many anyways.
Yes - it works both ways. My advice exactly.
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