Britain’s top antitrust enforcer pushed back against claims that the watchdog was forced into a reconsidering its Microsoft Corp.’s $69 billion Activision Blizzard Inc. deal veto as global regulators moved to clear the acquisition.
(Bloomberg) — Britain’s top antitrust enforcer pushed back against claims that the watchdog was forced into a reconsidering its Microsoft Corp.’s $69 billion Activision Blizzard Inc. deal veto as global regulators moved to clear the acquisition.
The UK’s Competition and Markets Authority was very clear with its decision on the deal “that there were serious concerns from this transaction” and didn’t succumb to outside pressure, Sarah Cardell said in an interview with Bloomberg Television’s Kriti Gupta and Dani Burger.
The regulator had found itself increasingly isolated as the lone watchdog standing in the way of the deal and was urged to “understand wider responsibilities” to foster economic growth by Chancellor of the Exchequer Jeremy Hunt.
The CMA could still block the deal after further investigation, Cardell said.
The once imperiled deal now has fresh momentum after a week of drama that saw the Federal Trade Commission lose a US court battle and Microsoft declare a truce with rival Sony Group Corp. to license the Call of Duty franchise for 10 years. The European Commission cleared the deal. The UK watchdog had initially vetoed the deal in April
“The remedies that were put forward by Microsoft at the time did not satisfy, did not resolve those concerns,” and the authority’s “prohibition decision stands,” Cardell said. “Now, it is up to Microsoft if they want to come up with a proposal that they think will address those concerns.”
The CMA’s original divestment suggestion was to force Microsoft to sell off its blockbuster game franchise Call of Duty. The firm has consistently said that it wasn’t something they would consider. Earlier this month, Bloomberg reported that Microsoft was mulling offering giving up some control of their cloud-gaming business in the UK as a way to appease them.
“We found that there were serious concerns in relation to cloud gaming and the proposals that were put forward by Microsoft at the time did not resolve our competition concerns,” Cardell said. “So a divestment may be one option, but it’s really up to them to come forward with a proposal that meets our requirements.”
A UK competition court agreed to a provisional pause of Microsoft’s appeal this week and a lawyer for the CMA said ongoing talks with the parties had been productive. Microsoft will now need to submit a restructured deal proposal to the agency, and a new probe may be triggered.
Microsoft and Activision announced they were extending the deal deadline to give them more time to iron out regulatory issues. Microsoft also agreed to increase the amount it would pay to Activision in case either side terminates the deal to $3.5 billion from $3 billion after Aug. 29, and to $4.5 billion after Sept. 15.
Cardell took over as CEO at the regulator full-time in December from predecessor Andrea Coscelli, becoming the first woman to run the agency.
–With assistance from Jonathan Browning and Stephanie Bodoni.
(Updates with divestment comment in the sixth paragraph)
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