Further to the Competition and Markets Authority’s announcement that it has blocked Microsoft’s proposed purchase of Activision, Alex Haffner, competition partner at law firm Fladgate, has commented.
He said:“The CMA’s investigation of this merger has had as many twists and turns as one of Activision’s computer games. In prohibiting the deal, the CMA has not only put itself in the firing line of the merging parties, but also set an important precedent for the EU Commission and US FTC whose deliberations are ongoing.
Interestingly, the CMA confirmed in its release that its competition concerns with the tie-up focussed on the relatively nascent cloud gaming market and not the games console market in which the parties had waged an aggressive and very public campaign to persuade regulators that it would not harm post-merger competition by making it more difficult for rivals (e.g. Sony) to access Activision’s core titles.
Nonetheless, the CMA’s release also reveals that the merging parties proposed remedies to address the CMA’s concerns but those remedies did not go far enough.
Whether the CMA’s decision causes the entire deal now to fall apart must be open to question, but no doubt the parties’ advisers will be thinking very carefully about how they might be able to salvage it.”
