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Microsoft is facing even more regulatory hurdles after its plan to acquire Activision Blizzard was blocked in the UK over concerns about cloud gaming. The Competition and Markets Authority has added more restrictions to both companies, and in an interim order, it detailed how these measures were added “for the purpose of preventing pre-emptive action” from Microsoft and Activision Blizzard.
According to the new restrictions, the two companies will need to secure prior written consent from the CMA if either company invests in the other’s development studios, acquires an interest in another business that holds an interest in the other company, or holds an option to acquire an interest in either of the mentioned examples.
Meanwhile, the UK government unveiled what it calls “smarter regulation” this week, essentially aiming to reduce red tape for businesses and foster a more competitive environment. “Taking advantage of post-Brexit freedoms, the Government will remove unnecessary red tape and regulatory burdens, ensuring rules and regulation for British businesses is proportionate and takes into consideration wider impacts on consumers, innovation, and competition–as well as direct costs, the UK government said.
While Microsoft and Activision Blizzard aren’t explicitly mentioned in this legislation, the new streamlined rules could potentially be good news for the two companies, although the impact of this proposal remains to be seen.
Microsoft is preparing to appeal the CMA’s judgment, as following the CMA’s decision, it began lawyering up with some high-level legal power, adding a lawyer who had previously represented Queen Elizabeth II, Boris Johnson, and Princess Diana to its team. In other regions, the European Union issued a formal anti-trust warning last year, and across the pond, the US Federal Trade Commission issued a legal complaint.
Former General Counsel of the FTC Alden Abbott has also weighed in on the CMA’s decision to block the deal from proceeding, saying that the body did not fully consider the facts. For more details, you can read up on what’s next for Microsoft and Activision Blizzard.
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