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The United Kingdom’s competition regulator has dealt a blow to Microsoft’s $75 billion deal to acquire video game giant Activision Blizzard. The Competition and Markets Authority (CMA) has expressed concerns that the deal could lead to a reduction in competition in the video game industry, which could result in higher prices and a reduction in choice for consumers.
Microsoft’s acquisition of Activision Blizzard was announced in September 2021, with the tech giant paying a hefty premium for the video game company. The deal is Microsoft’s largest ever, and it would give the company control of some of the world’s most popular video games, including World of Warcraft, Call of Duty, and Candy Crush.
However, the CMA has raised concerns that the deal could lead to a reduction in competition in the video game industry, which could result in higher prices and a reduction in choice for consumers. The regulator has said that the deal could reduce the number of competitors in the market, and this could lead to a lack of innovation and a reduction in the quality of video games. The CMA has also expressed concerns that the deal could lead to higher prices for video games, and this could reduce the accessibility of video games for consumers.
Microsoft has responded to the CMA’s concerns by saying that it will engage with the regulator to address its concerns. The company has said that it will work with the CMA to find a solution that ensures that the deal is approved and that it does not harm competition in the video game industry. Microsoft has also pointed out that it already operates in the video game industry, and that it has a strong track record of ensuring competition and choice for consumers.
However, the CMA has not been swayed by Microsoft’s arguments, and it has referred the deal to a Phase 2 investigation. This means that the regulator will carry out a more detailed investigation into the deal and will consider whether to block it or impose conditions to mitigate the risks to competition.
The CMA’s decision to refer the deal to a Phase 2 investigation is a major blow to Microsoft, as it means that the deal could be delayed or even blocked. The regulator’s decision will also raise concerns among investors, as it could signal that the CMA is taking a tougher stance on deals that could harm competition in the UK.
The video game industry has been undergoing a period of rapid consolidation in recent years, with many of the largest video game companies being acquired by tech giants. The CMA’s decision to refer Microsoft’s deal to a Phase 2 investigation could signal that the regulator is becoming more cautious about deals that could harm competition in the video game industry.
The CMA’s decision to refer Microsoft’s deal to a Phase 2 investigation is a significant development, and it will be closely watched by other tech giants and investors. The outcome of the investigation will have far-reaching implications for the video game industry and for the broader tech sector.
In conclusion, the United Kingdom’s competition regulator has dealt a blow to Microsoft’s $75 billion deal to acquire video game giant Activision Blizzard. The CMA has expressed concerns that the deal could lead to a reduction in competition in the video game industry, which could result in higher prices and a reduction in choice for consumers. The regulator has referred the deal to a Phase 2 investigation, which means that the deal could be delayed or even blocked. The outcome of the investigation will be closely watched by the tech sector and will have far-reaching implications for the video game industry and for the broader tech sector.
