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posted by janrinok on Friday April 28 2023, @11:09AM   Printer-friendly

UK government blocks Microsoft's proposed Activision purchase

In its long-awaited final report, the United Kingdom's Competition and Markets Authority said that Microsoft's proposed $69 billion acquisition of Activision would "result in a substantial lessening of competition" (SLC) in the supply of cloud-gaming services in the UK. As such, the regulator said that "the only effective remedy to this SLC and its adverse consequences is to prohibit the Merger."

The final report cites Microsoft's "strong position" in the cloud-gaming sector, where the company has an estimated 60 to 70 percent market share that makes it "already much stronger than its rivals." After purchasing Activision, the CMA says Microsoft "would find it commercially beneficial to make Activision's titles exclusive to its own cloud gaming service."

Microsoft has in recent months signed deals with Nvidia and smaller cloud-gaming providers in an attempt to "mak[e] even more clear to regulators that our acquisition of Activision Blizzard will make Call of Duty available on far more devices than before," as Microsoft Vice Chair and President Brad Smith said in a statement last month. But the CMA said these kinds of cloud-gaming deals—which Microsoft submitted to the CMA as a proposed remedy for any anticompetitive effects of the merger—were "limited to cloud gaming providers with specific business models" and thus not sufficient to address the regulator's concerns.

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Microsoft's president has attacked the UK after it was blocked from buying US gaming firm Activision, saying the EU was a better place to start a business.

The move was "bad for Britain" and marked Microsoft's "darkest day" in its four decades of working in the country, Brad Smith told the BBC.

The regulator hit back saying it had to do what's best for people, "not merging firms with commercial interests".

The UK's move means the multi-billion dollar deal cannot go ahead globally.

Although US and EU regulators have yet to decide on whether to approve the deal, the UK regulator the Competition and Markets Authority (CMA) said: "Activision is intertwined through different markets - it can't be separated for the UK. So this decision blocks the deal from happening globally."

If it had been approved, the $68.7bn (£55bn) deal would have been the gaming industry's biggest ever takeover, and would have seen Microsoft get hold of massively popular games titles such as Call of Duty, Candy Crush and World of Warcraft.

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  • (Score: 2) by VLM on Friday April 28 2023, @11:39AM (2 children)

    by VLM (445) on Friday April 28 2023, @11:39AM (#1303610)

    had to do what's best for people

    I'm struggling to think of any theoretical possible positives if the deal had gone thru.

    They could, um...

    Note that I'm not against capitalism or mergers or whatever in a general sense. But in this individual sense I'm not sure what anyone would gain.

    Can't MS find anything better to do with their vast piles of money? Go buy Ford and compete against Tesla, or buy govt bonds or something?

    It just seems kind of knee jerk on the part of MS. So we got a vast pile of money and no idea what to profitably do with it. I guess buy a giant competitor? Like really? Give the money back to the stockholders in the form of dividends or diversify into a wider new industry or ... anything other than "more of what we already do"?

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  • (Score: 2) by canopic jug on Friday April 28 2023, @01:28PM (1 child)

    by canopic jug (3949) Subscriber Badge on Friday April 28 2023, @01:28PM (#1303622) Journal

    Can't MS find anything better to do with their vast piles of money?

    What vast piles of money do you refer to? Their annual reported "profit" is far less than the lump sum they have received via government handouts say for for JEDI and other fraud. Keep in mind that just this year alone, they've laid off many tens of thousands of employees. Even the marketing gimmick, ChatGPT, is just chaff to distract from firings in the Azure division and the fact that much of Azure goes unused. In fact, if there was any demand at all for Azure, there would be no cycles left over to run their chaffbot.

    Money is not free speech. Elections should not be auctions.
    • (Score: 2) by VLM on Friday April 28 2023, @08:13PM

      by VLM (445) on Friday April 28 2023, @08:13PM (#1303750)

      What vast piles of money do you refer to

      Well their merger-ability in general. It just seems squandered on buying "yet another software company" Why not diversify into logistics or building mars rockets or anything else?