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Microsoft's $69 Billion Activision Deal Blocked by UK Watchdog (bloomberg.com) 73

Microsoft's $69 billion takeover of Activision Blizzard, suffered a hammer blow after Britain's antitrust watchdog vetoed the gaming industry's biggest ever deal, saying it would harm competition on the cloud. From a report: The Competition and Markets Authority said its concerns couldn't be solved by remedies such as the sale of blockbuster title Call of Duty or so-called behavioral remedies involving promises to permit rivals to offer the game on their platforms, according to a statement Wednesday. Pressure had been mounting on Microsoft as it lobbies at home and in Europe to convince watchdogs to clear the deal -- one of the 30 biggest acquisitions of all time. Crucially, the CMA's conclusions comes before decisions from the European Union and the US Federal Trade Commission, which is awaiting a hearing in the summer after formally suing to veto the transaction.
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Microsoft's $69 Billion Activision Deal Blocked by UK Watchdog

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  • The US and EU approved it. The UK wanted out of the EU, so it's fine to ignore them honestly.

    Surely, the money made in those markets operating after the purchase, is going to be significantly more than what they would gain by not going ahead with the deal but deciding to stay with the UK?

    Besides, the UK would likely ask Microsoft to come back eventually anyway.

    • by mccalli ( 323026 ) on Wednesday April 26, 2023 @08:55AM (#63477554) Homepage
      Read the summary at least:
      "Crucially, the CMA's conclusions comes before decisions from the European Union and the US Federal Trade Commission..."
      • Yup, my bad. I normally do at least read summaries, but was sure I had seen earlier headlines saying the US and EU had approved the deal.

    • by kurkosdr ( 2378710 ) on Wednesday April 26, 2023 @09:06AM (#63477570)
      Yeah, sure, Microsoft will exit the UK and hand over a country of 67 million people to Apple, Google, and Canonical. /s
      • Why not, if it means they can trade in the rest of the world with a population of around 2 billion, at least, and make far more money doing so?

        • Why not, if it means they can trade in the rest of the world

          They are trading with the rest of the world right now. They were doing so before proposing merging with Activision, they will do so afterwards.

          Your comment is one based on ignorance. Microsoft's UK revenue is about equal to Activision's *global* revenue. If Microsoft's CEO did what you suggest their shareholders would rightfully call for him to be replaced. Your suggestion is on financial grounds, colossally stupid.

          • Microsoft's UK revenue is about equal to Activision's *global* revenue.

            Yeah, I didn't realize this was the case. Fair enough.

        • Because they booked $5B in revenue in the UK last year, and they would probably like to continue doing that.

        • Comment removed based on user account deletion
      • by ranton ( 36917 )

        Yeah, sure, Microsoft will exit the UK and hand over a country of 67 million people to Apple, Google, and Canonical. /s

        The legal analysis I have read online state Microsoft would not need to completely move out of the UK to move forward with the deal. They would only need to hold off on selling Activision Blizzard games in the UK. That is likely worth it for them to move forward with the acquisition if they lose on appeals.

        Of course if the US and/or the EU rule similarly, either would likely be too much of a carve out to make the deal worth it.

    • Isn't there precedent, as in gaming titles that ignored the Canadian market because of their requirement to sell a French version?
      • That sounds about right given Quebec's wacky and desperate laws. Canadians can just buy from the US store anyway.

    • The UK wanted out of the EU

      Ignoring the UK competition regulator isn't anything to do with them wanting out of the EU (they always did have independent regulators).

      so it's fine to ignore them honestly.

      Is it? I want you to draft your announcement as Microsoft's CEO that you will present to the shareholder meeting telling them you're pulling out of a market of 67million wealthy westerners who collectively contribute 5billion pounds of revenue annually, and that you're firing 6000 staff.

      Let's see what you come up with.

    • Did you even read the summary before typing in a lie and submitting it? Clearly the people who modded you insightful didn't, as it says quite plainly that the Federal Trade Commission has sued to block the deal already, and the EU hasn't weighed in yet.

      From the summary:

      Crucially, the CMA's conclusions comes before decisions from the European Union and the US Federal Trade Commission, which is awaiting a hearing in the summer after formally suing to veto the transaction.

      Doesn't sound like the US and EU have approved the square root of jack shit to me.

  • I haven't been following this very closely and am not an international law expert so I am a bit confused.

    Can someone tell me how a UK agency can block the merger of two American companies on the recommendations of a Japanese company?

    Would this be the same as the US trying to block Heineken acquisition of Carlsberg based on testimony from Asahi?

    • As another person above has said:

      "Because they operate in the UK.

      If the UK doesn't approve, then they can't operate there."

      Microsoft is free to walk away from the UK and hand over the entire country to Apple, Google, and Canonical, but that's not going to happen really.
    • It's the same as anything else. Both Microsoft and Activision have a significant presence in the UK. If they want to continue to have such a presence, they need to play by UK rules - which now say they can't be the same company.

      If no other country disallowed it, Microsoft could buy the US and whatever EU-based companies in the Activision group, but they couldn't buy the UK one. Activision would need to find some other way to "handle" their UK business - I'd imagine most possibly through a local management b

  • That is an oxymoron. Just sayin.

    No more Windows updates for the U.K.! Guess it will the year of the Linux desktop in the U.K.

  • So much for my dreams of Infocom IP such as Zork, Planetfall, Enchanter, etc, getting a revitalization. The planned Activision brand people at Microsoft had specifically mentioned doing something with Infocom stuff, among other things, but now I guess it'll all just still sit in a filing cabinet for the foreseeable future. :/

    • Infocom and Sierra. Quite a few people got jobs at Microsoft after Sierra went belly up.

      • Definitely, them too. The shared Zork / Enchanter / Wishbringer / Starcross / etc gaming universe is admittedly my personal obsession... but I'd also enjoy Sierra's "lost" stuff getting some love, too. I'm prioritizing Infocom, though, not just out of personal preference but also because I feel like *some* of Sierra's stuff *has* gotten some recent attention. Especially King's Quest.

  • Microsoft is buying a video game company. Is video gaming some kind of crucial industry that the government needs to be involved in?
    Why should they care about "World of Warcraft" or "Call of Duty" or whatever?

    • Re: (Score:3, Insightful)

      by M_Hulot ( 859406 )

      Microsoft is buying a video game company. Is video gaming some kind of crucial industry that the government needs to be involved in? Why should they care about "World of Warcraft" or "Call of Duty" or whatever?

      To protect consumers from monopolies with higher prices and less choice. Almost every country has competition watchdogs.

      • Microsoft is buying a video game company. Is video gaming some kind of crucial industry that the government needs to be involved in?
        Why should they care about "World of Warcraft" or "Call of Duty" or whatever?

        To protect consumers from monopolies with higher prices and less choice. Almost every country has competition watchdogs.

        I can understand it for oil, wheat, drugs, essential services, etc.
        But video games? Who cares if the cost of "call of duty" goes up? Is there some essential right to cheap video gaming?

        • Re: (Score:2, Insightful)

          by Anonymous Coward

          Another one who doesn't understand the basics of competition law.

          It's not only about consumers, it's also about other businesses. If one company can - for example - become "game co" for the world, and ultimately shut out or buy out all other companies, do you think that's fine because you have designated the product as non-essential? What if you have "global ents co" which owns all means of entertainment? Is that healthy free market capitalism? Is that good for the consumer, when the only way to get any "en

        • by M_Hulot ( 859406 )
          It is a political view. I think governments should stop big business monopolizing industries and gaining excess profit at the expense of customers. The Adam Smith, classical economic free-market idea was that the market was optimal as long as it was competitive. There's a different political view that believes that government should stay out as much private activity as possible. You are welcome to hold the libertarian view. I'm not saying that this is wrong. But this isn't the approach taken by the US, US
  • Another thing the EU has no sense about. For one, Microsoft and Activision Blizzard aren't really competitors, even in the video game industry. Sure, they both make and publish games, but Microsoft does so much more. It's like saying Square Enix is a competitor to Nintendo - kinda, but not really. Microsoft's competition (in video game space) is Sony and Nintendo. That's it. Unless Activision Blizzard is going to start making hardware, they are not a real competitor to Microsoft.

    Secondly, Activision Blizzar

    • by Jahta ( 1141213 )

      Another thing the EU has no sense about.

      Since Brexit [wikipedia.org], the UK is not part of the EU. This is a decision by a UK-only regulator.

      • by Bahbus ( 1180627 )

        Ah, right. I always forget that specific detail. However, the point stands. The former EU member just has even less sense than the actual EU.

        • by Jahta ( 1141213 )

          Ah, right. I always forget that specific detail. However, the point stands. The former EU member just has even less sense than the actual EU.

          In the US, the Federal Trade Commission has already stated their intention to block the Microsoft-Activision deal [ftc.gov]. The EU has not declared any position on the deal, so far. And one of the biggest objectors to the deal worldwide is Sony [theverge.com], a Japanese corporation.

          So the point that this is somehow an "EU issue" clearly does not stand.

          • by Bahbus ( 1180627 )

            You misunderstood what I meant. Substitute "EU" in my original post for "UK" and the rest of the point of the post is the same. My brain still auto-associates UK with EU, because I forget that the UK was actually stupid enough to leave (I was one of the people who saw the initial idea and was like "There is no way they are that stupid, won't happen"). And the EU, in general, has a low amount of sense on a lot of issues - just not this one seemingly so far.

            The FTC is a separate amount of stupid and useless.

            A

  • What cloud competition are they talking about? Activision doesn't compete with Azure, and the entire idea of cloud-hosted gaming is so new that nobody knows if it will even survive.

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