Report: Microsoft expects UK to block Activision merger deal

A small selection of characters that would be part of Microsoft if the proposed Activision/Blizzard merger goes through.
Zoom in / A small selection of characters that would be part of Microsoft if the proposed Activision/Blizzard merger goes through.

Microsoft’s legal team now expects Britain’s Competition and Markets Authority to formally oppose its long-planned $69 billion merger with Activision Blizzard. That’s according to “four people briefed on the matter” who cited several paragraphs deep in a New York Times report on the direction of globalized antitrust law. Microsoft expects the European Union’s separate “in-depth” investigation into the deal to be more amenable to “potential remedies” that would allow it to move forward, according to the Times. As these proceedings play out on the other side of the Atlantic, the US Federal Trade Commission seems content to limit its response to an administrative lawsuit rather than issue an emergency injunction that could block the deal from moving forward.

Representatives for Microsoft and Activision have yet to comment publicly in response to a request from Ars Technica.

A British bulldog with teeth

The UK’s Competition and Markets Authority first questioned Microsoft’s proposed takeover last July, before escalating to an in-depth ‘Phase 2’ investigation in September. In announcing the move, the UK regulator raised concerns that the deal could lead to a “significant reduction in competition” in the markets for gaming consoles, subscription gaming services and cloud gaming.

The Commission recently granted an eight-week extension to the statutory deadline for completing this investigation, moving the final date to April 26. However, Bloomberg reports that the preliminary findings of this survey are expected to be released as early as this week.

Since it was created following Britain’s contentious exit from the European Union, the UK CMA has been an international leader in stopping anti-competitive mega-mergers. And a negative ruling by the CMA could be particularly damaging for Microsoft and Activision, as the UK’s Competition Appeal Court rarely overturns the regulator’s decisions.

While the CMA ruling technically could not be enforced internationally, any move preventing a merged Microsoft/Activision from operating in the UK would likely survive the deal in other jurisdictions.

The EU, meanwhile, reportedly issued its official statement of objections to Microsoft this week, giving the company several weeks to respond.

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