UK challenges $69B #Microsoft | #Activision DEAL, citing #potential_harm to gamers | UK: Deal could harm #competition in consoles, #subscription_services, and #streaming.
The #United_Kingdom's Competition and Markets Authority (#CMA) is #challenging Microsoft and Activision Blizzard to #justify their #planned_merger, saying the deal "could #substantially #lessen_competition" in the #gaming_industry.
Microsoft announced its plan to buy Activision Blizzard for $68.7 billion in #January??
"Microsoft is one of three large companies, together with #Sony and #Nintendo??? that have led the market for gaming consoles for the past 20 years with limited entries from new rivals," the CMA said. "Activision Blizzard has some of the world's best-selling and most recognizable gaming franchises, such as #Call_of_Duty and #World_of_Warcraft.
The CMA is #concerned that if #Microsoft buys Activision Blizzard it could #harm_rivals, including recent and future entrants into gaming, by refusing them access to Activision Blizzard games or providing access on much worse terms."
The CMA said these "concerns warrant an #in_depth Phase 2 INVESTIGATION," so Microsoft and Activision Blizzard have been #ordered "to #submit_proposals to address the CMA's concerns" within #five working days.
"If suitable proposals are #not submitted, the deal will be referred for a Phase 2 investigation," which would "allow an independent panel of experts to #probe in #more_depth the risks identified at Phase 1," the CMA said.
Besides Microsoft's #Xbox console, the CMA noted Microsoft's #Azure cloud computing platform and the #Windows operating system. "The CMA is concerned that Microsoft could #leverage Activision Blizzard's games together with Microsoft's strength ACROSS #console, #cloud, and #PC operating systems to #damage_competition in the nascent market for #cloud_gaming services," the announcement said.
In another #high_profile case, the CMA launched a Phase 2 investigation of a proposed #Nvidia #Arm DEAL. The companies later scrapped the planned #merger.
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