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CMA Calls out Microsoft’s Bullying in Approving its Activision-Blizzard Buy

Did the CMA Buckle to Big Tech’s Bullying?

Oct 16, 2023


  • When any regulatory authority buckles to an aggressive multipronged intimidation campaign, it emboldens and enables continued bad behavior by Big Tech.
  • Microsoft and Activision-Blizzard won approval after threats to divest from the UK and hold their consumers hostage.
  • The CMA originally dismissed behavioral remedies in denying the merger but has landed there anyway.

Every Friday the 13th, someone is bound to be unlucky. October 13th was no different. This Friday the 13th, gamers, developers, consumers, and competition are the big losers. Hours after the Competition and Markets Authority (CMA) gave the merger conditional approval, Microsoft closed the largest merger in tech history with Activision-Blizzard.

The unprecedented U-turn by the CMA followed an aggressive multipronged intimidation campaign by the world’s second-largest company. Sarah Cardell, CEO of the CMA, didn't mince words when discussing Microsoft's tactics:

But businesses and their advisors should be in no doubt that the tactics employed by Microsoft are no way to engage with the CMA. Microsoft had the chance to restructure during our initial investigation but instead continued to insist on a package of measures that we told them simply wouldn’t work. Dragging out proceedings in this way only wastes time and money.

However, the regulator let the merger proceed with a press release headline exclaiming, “Microsoft concedes a game changer that will promote competition.” The CMA claims that the divestment of cloud gaming rights to Ubisoft will do the following:

The new deal will stop Microsoft from locking up competition in cloud gaming as this market takes off, preserving competitive prices and services for UK cloud gaming customers. It will allow Ubisoft to offer Activision’s content under any business model, including through multigame subscription services. It will also help to ensure that cloud gaming providers will be able to use non-Windows operating systems for Activision content, reducing costs and increasing efficiency.

While the revised deal is referred to as a divestment, it's important to recognize that it still requires continual monitoring by the CMA to ensure compliance with the accepted undertakings.

In other words, it's more behavioral in nature, representing a departure from the CMA's original justification for denying the deal in April. In a press release at the time, the CMA said, “accepting Microsoft’s [behavioral] remedy would inevitably require some degree of regulatory oversight by the CMA. By contrast, preventing the merger would effectively allow market forces to continue to operate and shape the development of cloud gaming without this regulatory intervention.”

While the CMA insists that its decision is based on comprehensive undertakings, it's hard to ignore the lingering questions about the influence and tactics of a tech giant like Microsoft. And we’re left with a situation where one nation’s regulator is expected to police the behavior of a two-trillion-dollar behemoth that has a history of lying to regulators and violating its commitments.

All said and done, did Microsoft’s bully campaign work? We’ll let you decide.