Page 110 - SAMENA Trends - January-February 2023

REGULATORY & POLICY UPDATES SAMENA TRENDS

UK Competition Regulator Opposes Microsoft-Activision Merger

The UK’s Competition and Markets Au-
thority (CMA) has found that Microsoft’s
proposed acquisition of gaming company
Activision Blizzard could harm competition
across multiple markets. The CMA’s provi-
sional conclusions, issued on 8 February,
found that the deal would likely impact
competition in cloud gaming services and
the supply of consoles. The provisional
findings come after five months of investi-
gation into the $69 billion deal, announced
in January 2022 and cover antitrust con-
cerns regarding the supply of both cloud
gaming services and consoles. The merger
has proved controversial, attracting regula-
tory scrutiny from several other authorities,
including in Brussels and Washington. The company would reduce competition, poten- Alaily, Microsoft’s Corporate Vice President
CMA is now seeking input from the com- tially harming UK gamers and impacting the and Deputy General Counsel, in response to
panies involved, as well as comments from future of the gaming environment. The UK the CMA’s findings. “Our commitment to
interested parties ahead of its final report regulator also found that a small number of grant long-term 100% equal access to Call
on the acquisition, due by 26 April. The UK high-profile games, including Call of Duty, of Duty to Sony, Nintendo, Steam and oth-
competition authority will advance a probe are key in driving competition between dif- ers preserves the deal’s benefits to gamers
into Microsoft’s acquisition of gaming ferent consoles and that it would likely be and developers and increases competition
company Activision Blizzard, it announced. to Microsoft’s commercial advantage to in the market. 75% of respondents to the
Following the launch of initial proceedings make Activision’s games again either only CMA ‘s public consultation agree that this
looking into the deal last July, the CMA in available on its own consoles or available deal is good for competition in UK gaming.”
September announced that it would move on others, but under materially worse con- The UK is not the only jurisdiction in which
ahead with a formal investigation into what ditions. The CMA noted that buying game concerns about the merger have been
would be Microsoft’s largest acquisition to studios and then making their content raised. In December, the US Federal Trade
date. The purchase would make the tech available only on Microsoft’s own plat- Commission issued a complaint requesting
giant one of the largest gaming companies forms has been a strategy used by the com- that the deal be blocked, referring to what it
by revenue, which prompted concerns from pany before in previous purchases. Given described as “Microsoft’s record of acquir-
the UK watchdog that control by Microsoft the close competition between Xbox and ing and using valuable gaming content to
over Activision’s most popular games, such Sony-owned PlayStation, Microsoft’s ability suppress competition from rival consoles”.
as Call of Duty, could harm rivals and lead to gatekeep access to games such as Call The EU launched its own full-scale investi-
to industry dominance. The CMA said that of Duty could, the CMA said, lead to higher gation into the deal in November after Mi-
its investigation indicated that it would ben- prices and lower quality for UK gamers over crosoft chose not to put forward any pro-
efit Microsoft to make Activision’s games time. In a statement of possible remedies, posed concessions to alleviate preliminary
exclusive to, or available at a much higher the CMA suggested that Microsoft could concerns outlined by the European Com-
quality on, its own cloud gaming service. ensure that games such as Call of Duty are mission. According to media reports, Mic-
Given Microsoft’s existing presence in this available to other platforms after the merg- rosoft received a statement of objections
market, including its ownership of Xbox, er. “We are committed to offering effec- from the EU antitrust authority last week,
Azure and Windows, the regulator conclud- tive and easily enforceable solutions that marking the start of the second phase of
ed that buying an already powerful gaming address the CMA’s concerns,” said Rima the investigation.

EC to Rule on Orange-VOO Deal by 11 April

EU antitrust regulators will decide by 11 concerns. Orange announced a final EC temporarily halted its investigation into
April whether to approve Orange Belgium’s agreement to acquire a 75% minus one the deal last October to give Orange time to
bid to acquire a majority stake in cable share of regional quad-play operator VOO reach a wholesale agreement with Telenet,
operator VOO. The decision to restart the in December 2021, based on an enterprise enabling its rival to access VOO’s network
phase II investigation comes after Orange value of EUR1.8 billion (USD1.95 billion). in Wallonia and provide fixed-mobile
announced a fixed network access deal Having warned the proposed transaction converged services throughout Belgium.
with rival Telenet to address competition could significantly reduce competition, the
110 JANUARY-FEBRUARY 2023