UK watchdog reopens consultation on Microsoft's bid for Activision Blizzard

CMA admits Sony deal might change the battlefield

The UK's markets watchdog has reopened a consultation on the $69 billion tie-up between Activision Blizzard and Microsoft months after it blocked the proposed sale on the back of competition concerns.

Microsoft this week wrote to the Competition and Markets Authority (CMA) to point out that fear of skewing the gaming console market gaming might be allayed by its 10-year agreement with Sony to give the Japanese PlayStation maker access to the blockbuster Call of Duty games series.

"The Sony Agreement ensures that perhaps the most powerful player in the video games industry will have access in the long term to the Activision game it considers most important," Microsoft said [PDF].

In April, the CMA said it opposed Microsoft's merger with Activision in order to "protect innovation and choice in cloud gaming." It expressed concerns the move would stifle competition in what is a growing market and moved on to consider "remedies" to mitigate any warping of fair competition.

In response to the Sony deal and other submissions from Microsoft this week, the CMA said: "It is not a usual part of the CMA's process during a remedies implementation period to consult on submissions received in response to a consultation on a proposed undertaking or order. However… the Inquiry Group has decided it is appropriate to do so in this case."

The watchdog invited comments on Microsoft's submissions from interested parties, setting a new deadline of the end of August 4, 2023.

In March, Sony had said it would try to block the merger, and said it was "extremely sceptical that an agreement with Microsoft could be reached, much less monitored and enforced effectively," citing concerns over future access to the Call of Duty series.

Microsoft in May filed an appeal against the UK competition watchdog's decision to block its takeover of Activision Blizzard, just days after China became the latest country to approve the sale.

Following the decision, Brad Smith, Microsoft president and vice chair, said the company was determined to buy Activision Blizzard and intended to appeal the decision.

Just last month, Sony revised its prior position and agreed to a deal with Microsoft.

In December last year, the Federal Trade Commission filed a lawsuit to block the merger, claiming it would suppress competition.

However, earlier this month, the regulator's attempt to stall the sale was struck down by a US federal judge, who is unconvinced the mega-acquisition would harm markets. ®

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