UK competition regulator finds Microsoft-Activision deal ‘could lead to competition concerns’

The UK antitrust authorities are concerned that Microsoft’s blockbuster acquisition of Activision Blizzard could create a monopoly in the burgeoning cloud gaming space. The Competition and Markets Authority (CMA), which began investigating the deal back in July, says it is not yet reassured by promises Microsoft has made to see the deal through. It appears that once Activision is part of Microsoft, the Xbox maker will lose its “control over popular games like Call of Duty and World of Warcraft‘ to ‘harm competitors’ by denying them access to popular titles. Microsoft has already publicly pledged not to stockpile exclusives (and said Actiblizz’s library isn’t all that anyway), but kind words haven’t mollified officials.

In a statement, it said it gave Microsoft and Activision five days to come up with proposals that would address its concerns. However, if these do not pass screening, the Bureau will launch a lengthy “Phase 2” investigation involving an independent panel to scrutinize the deal further. That will likely delay any finalization of the deal, which would then only be approved if regulators were satisfied the deal would not cause a “significant reduction in competition.” It’s likely that whatever happens, Microsoft will have to commit to not using its growing influence to hurt other companies in the industry by depriving them of key franchises.

Microsoft’s gaming boss Phil Spencer has already reacted to the announcement and reiterated the previous promise not to remove Call of Duty from PlayStation, for example. Spencer pointed out the cross-platform appeal of Minecraft, a title Microsoft acquired in 2014 as proof of the company’s good faith. Activision CEO Bobby Kotick released an open letter to employees saying the company will be “fully cooperating” with regulators, who are taking “reasonable” steps to ensure there are no risks to competition.

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