UK's CMA is running out of excuses to block Microsoft Activision deal
Microsoft has submitted a change in circumstances document to the UK's Competition and Markets Authority (CMA) urging it to reverse its decision on the companies buyout of Activision.
The UK's CMA has been the biggest hurdle in the Microsoft Activision deal; the regulator blocked it back in April citing concerns towards the growth of cloud gaming should Microsoft have the exclusive rights to Activision Blizzard titles. The deal has since been approved in everywhere but the UK with EU regulators giving the go-ahead mere weeks after the CMA's decision, followed by a win against the FTC in US Federal Court.
Now – following the CMA delaying it's final ruling to August 29, 2023 – Microsoft has submitted a change of circumstances document to the CMA. The document cites that the CMA was unable to take into account deals made after the CMA's decision such as one made with cloud gaming platform Nware back in April via a Tweet from Brad Smith. Microsoft states in the report that "these commitments constitute a material change of circumstance, as well as a special reason for reaching a different decision".
Microsoft follows up by stating "since the FR[Final Report], significant new material has become available which is relevant to the evidential assessment in the FR and which undermines the FR’s conclusions" while also citing the 10-year agreement made with Sony to keep Call of Duty on PlayStation as further evidence towards this claim.
In a statement to Mirror Gaming, a CMA spokesperson said “Microsoft has submitted a document detailing why it believes there are material changes of circumstance and/or special reasons why the CMA should not impose a final order to prohibit the merger." before adding “Submissions of this nature are possible but are very rare. We will consider Microsoft’s submissions carefully, along with other responses from interested parties, ahead of the 29 August statutory deadline".
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A recent report stated that Microsoft was reportedly considering making adjustments to the proposed deal which could involve selling the cloud gaming rights for titles in the UK to comply with the CMA's concerns. Although considering this latest appeal, perhaps that discussion seems like a last resort for Xbox.
And the cycle continues
While I'm not exactly in favour of this deal and the potential monopolisation of the games industry, I can't help but admit that the Xbox team makes a compelling argument with this latest appeal. The deals being made after with other cloud gaming providers and console manufacturers are too big to not consider. Microsoft also acknowledges that these deals can't be "broken, terminated or renegotiated without very significant regulatory consequences for Microsoft".
It's becoming more and more inevitable that this deal will go through, the question now is what it will look like when it's all said and done. Considering Microsoft's arguments in this latest appeal the company is obviously angling to keep the cloud streaming rights in the UK, but if the CMA pushes back, UK gamers could end up losing out on some Xbox Game Pass cloud titles in the future. Personally, I can't see that happening following this latest appeal, but then again, I don't think anyone expected cloud gaming to be the CMA's main concern in the first place.
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