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.
Re:Convenient. (Score:4, Interesting)
Well paid, I mean, played, sony.
Why pick which corporate behemoth to white knight? More competition is generally good for customers. The UK competition watchdog will probably roll over in the end. But this ruling seems a good one to me.
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The UK competition watchdog will probably roll over in the end. But this ruling seems a good one to me.
If sony weren't allowed to buy up studios and platform lock them, and if that weren't a major strategy, sure, I agree. I just don't have faith that will be applied to them also.
Then there was this affair [service.gov.uk].
The UK regulator was using everything sony gave them word for word without even necessarily assessing whether it was truthful. To which microsoft demanded subpoenas to show where some of those claims came from, which sony refused to put forward [fosspatents.com].
That along with some of the things sony have said [vgchartz.com] may have co
Re:Convenient. (Score:5, Insightful)
I never heard of Firewalk before that announcement.
Also I think there's something quite different between acquiring Firewalk, a 150-person company, versus Activision which is a 13000-person company.
What you'd have to do is argue the strategy of acquiring lots of small companies is the same anticompetitive effect as acquiring a single large company, which is difficult; it's easy to see how merging two giant companies is anticompetitive, but a large company acquiring a single or even a handful of small companies, this is much less clear adverse impact on the markets. If nothing else, a stream of small acquisitions has a more gradual impact than a single large acquisition.
Also remember: perfect is the great enemy of "good enough", and I would take not letting Microsoft (or any other large company) buy Activision as a "good enough" move.
Re:Convenient. (Score:4, Insightful)
Also I think there's something quite different between acquiring Firewalk, a 150-person company, versus Activision which is a 13000-person company.
Would you feel the same about acquiring 80 companies like Firewalk? What about last year where Sony aquired Bungie with close to 1000 employees, one of several video game companies they aquired.
Activision didn't naturally grow to a 13000 company. They bought smaller companies to get that size. What you're saying is you're okay with Sony doing the same thing as Microsoft, but just not happy that Microsoft is able to do it in one bulk transaction.
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Generally lots of smaller transactions takes longer to accomplish, allowing time for the competition to react and also for other players to enter the market to fill any opportunity that opens up through those transactions reducing choice to consumers. It is usually best for consumers that those takeovers don't happen at all, but when they do then it is preferable to have them spread over a longer period of time than completed in one hit.
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Would you feel the same about acquiring 80 companies like Firewalk? What about last year where Sony aquired Bungie with close to 1000 employees, one of several video game companies they aquired.
Combined all of Sony's acquisitions in the last 10 years is still less than one Activision. And MS has acquired studios in addition to Activision. So no, I do not see the two as equivalent.
Activision didn't naturally grow to a 13000 company. They bought smaller companies to get that size. What you're saying is you're okay with Sony doing the same thing as Microsoft, but just not happy that Microsoft is able to do it in one bulk transaction.
I am disagreeing with your assertion that they are the same thing. In terms of scale, Activision is massively larger than Firewalk. It would take 80 Firewalks just to get close which by the way Sony has not acquired 80 studios. And that does not take into account that Activision is a publisher and distributor so it contro
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vs microsoft a 2 trillion dollar company
And that would be a False equivalence logical fallacy as we are talking about gaming studios. Sony makes general electronics like TVs and owns movie studios. MS does not.
Lets make the really big guy allowed to keep getting bigger right?
If we want to completely ignore the EXACT industry we are talking about, sure. By that absurd logic, Meta is smaller than MS therefore Meta's substantial market lead in social media is not a factor when talking Facebook vs whatever MS offers. Also by that logic, Apple is bigger than MS. Therefore in terms of operating systems, we should ig
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Also remember: perfect is the great enemy of "good enough", and I would take not letting Microsoft (or any other large company) buy Activision as a "good enough" move.
If this was applied equally, and the buyouts of bethesda by microsoft was blocked, and the buyout of bungie by sony were also blocked on equal terms I'd be fine with that.
but a large company acquiring a single or even a handful of small companies, this is much less clear adverse impact on the markets.
Depends on how it's handled, in other areas having any smaller potentially strong competition automatically eaten ( see mass IBM/google/facebook acquisitions of the past depending on era) can be less than great for competition.
So far microsoft has been a reasonable player in letting everything be cross platform and even cross play. While s
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So far microsoft has been a reasonable player in letting everything be cross platform and even cross play.
Everything? Microsoft has made things cross platform within its own platforms. Windows, XBox
Fact: Sony has made far more of its internal studio IP compatible with Windows than Microsoft or Nintendo combined have ever done with Sony.
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Everything? Microsoft has made things cross platform within its own platforms. Windows, XBox
I can buy these cross platform things, and play them with my xbox using friends using my linux machine, without ever having had a windows machine this century.
I don't really consider linux a microsoft platform, as much as they themselves are for it with all the cloud hosting business it brings them. More importantly the pc isn't a controlled platform like the consoles are.
Microsoft has made things cross platform within its own platforms. Windows, XBox
I guess minecraft legends doesn't exist then. A microsoft game that you can pick up on ps5 and play with xbox today.
The few sony ports t
Re:Backwards (Score:1)
You got this backwards. The lack of competition is having a powerhouse app on all systems. The competition comes when Sony has to create a game to compete. Innovation comes from that. Sony is big enough to do it easy.
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I want to be clear - I'm not saying at all that Sony isn't guilty of anti-competitive practices. I'm saying that a juggernaut buying another juggernaut has a high risk of being anti-competitive, so why take that risk?
Deal with that issue, then go and deal with Sony separately. Don't just say "oh Sony buys companies, let Microsoft do it too."
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>it's hard to see how allowing Sony to continue to acquire gaming firms, and Microsoft not too
But that is not what they are doing. They aren't saying Microsoft can't buy studios the size of Haven Studios, Bungie, Savage Game Studios, and Firewalk. They totally still can, just like Sony. They can't buy Activision is all they are saying, and you know what? They'd say the same thing to Sony at this point.
So how is that unfair?
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This in no way justifies double-standards, but Microsoft has a proven record of trying to turn one market dominant position into more than one market dominant position through anticompetitive practices, so a little extra scrutiny is probably warranted on that alone.
That being said, what's good for everyone regarding anticompetitive practices from one behemoth megacorporation, should be good for every megacorporation.
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Re:Why does the UK have a say? (Score:4, Informative)
Because they operate in the UK.
If the UK doesn't approve, then they can't operate there.
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Right, so Microsoft should just be willing to write off all the Windows and Office licensing revenue from the UK because they're being mean and won't let them buy a video game studio.
Because that's basically what you're saying.
By the way, Microsoft booked about $5B in revenue in the UK in 2022, so writing off that market is probably a pretty stupid idea regardless of how "insignificant" you think "the UK has be" since brexit.
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Activision's revenue in 2022 was $7.53B
If Microsoft isn't allowed to do business in the UK after merging, then if they merged they would be losing the UK revenues of BOTH Microsoft and Activision, not trading one for the other. Also, not being able to sell Microsoft products into any significant country (which the UK still is despite Brexit) would threaten their system of lock-in. The value proposition of Microsoft is compatibility.
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Lock-in is important to them, but it isn't the only dimension to their business.
It isn't, but all the other ones are powered by it. Otherwise you'd pick a superior solution.
They also end up paying up to 3B if they have to back out of the merger.
Do they have to pay that if the merger is blocked, or only if they choose to back out? Nobody can reasonably argue in court that they haven't been willing to make concessions to see the merger through...
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Right, so Microsoft should just be willing to write off all the Windows and Office licensing revenue from the UK because they're being mean and won't let them buy a video game studio. [...] By the way, Microsoft booked about $5B in revenue in the UK in 2022, so writing off that market is probably a pretty stupid idea regardless of how "insignificant" you think "the UK has be" since brexit.
The is almost certainly not how it would play out in a worst case scenario. If Microsoft cannot win in appeals, the carve out would most likely be Microsoft removing all Activision Blizzard content from GamePass in the UK. The legal assessments I have read online view that to be the most likely outcome if Microsoft cannot reverse this decision.
The UK is unlikely to have the power to stop this deal. The GP is likely correct that Microsoft would rather give up on UK revenue than give up on this deal, because
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Because Microsoft and Activision would very much like to continue selling products in UK markets.
If they want to go ahead and give that up, then they can dismiss the UK's objections without any problem.
Just pull out of the UK then. (Score:1, Troll)
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.
Re:Just pull out of the UK then. (Score:5, Informative)
"Crucially, the CMA's conclusions comes before decisions from the European Union and the US Federal Trade Commission..."
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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.
Re:Just pull out of the UK then. (Score:4, Insightful)
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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?
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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.
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Microsoft's UK revenue is about equal to Activision's *global* revenue.
Yeah, I didn't realize this was the case. Fair enough.
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Because they booked $5B in revenue in the UK last year, and they would probably like to continue doing that.
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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.
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That sounds about right given Quebec's wacky and desperate laws. Canadians can just buy from the US store anyway.
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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.
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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.
Someone Explain (Score:2)
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?
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"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.
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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
Britian's Antitrust Watchdog? (Score:1)
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.
Infocom (Score:2)
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. :/
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Infocom and Sierra. Quite a few people got jobs at Microsoft after Sierra went belly up.
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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.
Why does the government get involved in games? (Score:1)
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?
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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.
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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?
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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
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Oh Look (Score:1)
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
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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.
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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.
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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.
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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
Cloud gaming? What? (Score:2)