Microsoft Reads Room And Expects UK Regulators To Oppose Activision Deal
Microsoft's bid to buy Activision-Blizzard Entertainment has faced a tough road and the tech giant believes it is about to get harder. The company is already facing opposition from the European Commission and the Federal Trade Commission (FTC).
As soon as Microsoft announced its intent to buy Activision-Blizzard, companies such as Sony sounded the alarm bells. The concern is that if the deal goes through, Microsoft can make games like the Call of Duty franchise exclusive to Xbox while also extending dominance in the cloud gaming space. Now, it appears Microsoft fully expects UK regulators, the Competition and Markets Authority (CMA), to join in opposition to the transaction with the EU and FTC.
In a report by the New York Times, it stated, "Microsoft's legal team also expects the antitrust authority in Britain to oppose the transaction."
Microsoft hopes to appease the EU and UK regulators with the concessions it is willing to make. If so, it would make for an easier path to resolution with the FTC before the scheduled trial later this year. However, it is possible that one agency could apply pressure on the other two to oppose the deal.
Eleanor Fox, a professor at N.Y.U. law school, told the NY Times, "The new heads are trying to understand new harms. They're moving into new territory."
In the past, the European Commission was seen as the hardest hurdle to overcome for deals like this. The U.S. was viewed as the opposite, with a long history of giving in to big tech. Now, however, both the U.S. and Britain's CMA are taking tougher stances against mergers and big tech in general. This comes as voters are wanting politicians to rein in the power corporations have held for so long.
In a politically charged atmosphere that is moving away from backing big tech at every turn, it is unclear what the final outcome will be. With all three of the agencies wanting to appear tougher toward deals like this, it will be interesting to see which, if any, accepts Microsoft's concessions first, and how long it will take to come to a final decision on the transaction.