Following the Competition and Markets Authority blocking Microsoft’s acquisition of Activision Blizzard, the publisher revealed that it would appeal the decision. Speaking to Bloomberg, Microsoft vice chair and president Brad Smith said the company remains “fully committed” to the acquisition.
“We remain fully committed to this acquisition and will appeal. The CMA’s decision rejects a pragmatic path to address competition concerns and discourages technology innovation and investment in the UK.”
A spokesperson for Activision added, “The CMA’s report contradicts the ambitions of the UK to become an attractive country to build technology businesses. We will work aggressively with Microsoft to reverse this on appeal.”
According to the CMA’s report, the final decision came down to Microsoft’s failure to provide a solution for the concerns with cloud gaming. Due to owning a dominant market share of cloud gaming services, on top of the Azure and Xbox Cloud Gaming infrastructure, the authority felt that Microsoft having more advantages would “risk undermining the innovation crucial to the development of these opportunities.”
Though Microsoft provided a proposal to address some of the concerns, the CMA felt it didn’t cover “different cloud gaming service business models, including multigame subscription services,” and wasn’t “sufficiently open to providers who might wish to offer versions of games on PC operating systems other than Windows.” Of course, standardizing the “terms and conditions on which games are available, as opposed to them being determined by the dynamism and creativity of competition in the market” didn’t help.
Time will tell how the appeal goes, so stay tuned. Microsoft and Activision also have the US Federal Trade Commission’s lawsuit to deal with, especially since the latter is in no mood to settle.