Last week, I reported on Microsoft's $69bn deal to acquire Activision Blizzard is under scrutiny in the UK. Microsoft has gone on a charm offensive As the Competition and Markets Authority (CMA) starts its Phase 1 investigation into Microsoft, the authority has made a comment on its concerns over the deal.
It seems the CMA is worried the Activision Blizzard deal will stifle competition in the growing cloud game streaming market. Specifically, the watchdog says, “Microsoft could use its control over popular games like ‘Call of Duty' and ‘World of Warcraft' post-merger to harm rivals.”
CMA is the competition regulator in the UK, so Microsoft will need its approval for the deal to go through. In its statement, the CMA will look at how the console market will be affected by the merger with Activision Blizzard.
“As the multi-game subscription market is still in its infancy, the effect of the Merger could be to tip or significantly increase concentration in the market in Microsoft's favour before future rivals have a chance to develop,” CMA adds, in reference to Microsoft's Xbox Game Pass service.
Additionally, the regulator will look into potential issues that could happen regarding “recent and future rivals in multi-game subscription services and cloud gaming.”
The CMA wants both Microsoft and Activision Blizzard to respond to its questions by September 8. If a response is not given the investigation will progress:
“If our current concerns are not addressed, we plan to explore this deal in an in-depth phase two investigation to reach a decision that works in the interests of UK gamers and businesses,” says Senior Director of Mergers at CMA Sorcha O'Carroll.
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