Following the Federal Trade Commission’s (FTC) original loss blocking Microsoft’s Acquisition of Blizzard and their revisiting of the issue, the deal still has one major regulatory hurdle left: the Competition and Market Authority (CMA) in the British market. Microsoft recently released a revised agreement with Activision that addresses the CMA’s original concerns. While the CMA and FTC haven’t officially signed off, it’s time for the agencies to catch up and recognize that the merger does not threaten competition.
In 2023, the CMA blocked the acquisition of gaming company Activision, the developers behind significant franchises such as Call of Duty and Diablo. The decision was based on the fear that Microsoft would use ownership to block access to the games by other consoles and reduce competition in the cloud gaming market.
The revised merger agreement that made the CMA reconsider includes selling streaming rights to Activision’s games to Ubisoft, making them available on multiple platforms, including Microsoft’s.
While this mostly clears the way for the merger, it has not yet gained final approval from the CMA, citing enforcement concerns. As the CMA considers approving the deal, the FTC is appealing the original court decision in another attempt to block the deal. The two agencies should recognize what most of the world already has, that this merger is not a threat to competition in the cloud gaming market.
When the merger was announced, countries worldwide went through the process of determining whether it would lead to a monopoly for Microsoft, especially in the cloud gaming market. The countries that approved it without issue were Japan, Serbia, Brazil, Chile, and Saudi Arabia. The Japan Fair Trade Commission (JFTC) concluded that the proposed acquisition would not negatively impact competition in the relevant markets. A similar conclusion was reached by the US courts in which it was determined that Microsoft would not limit Activision titles to its platforms at the expense of other console makers such as Sony and Nintendo.
As the criticisms of the Microsoft-Activision merger have been examined and disproven, it is time to drop the opposition to the merger in the UK and the US. Consumers stand to benefit from the merger as it will allow a broader audience to enjoy Activision’s titles through Xbox GamePass and cloud gaming, which increases the interchangeability between devices and will enable people without a dedicated console or PC to play on other devices.
As regulators at the CMA and FTC make their final decision on the Microsoft-Activision merger, they should consider the consumer benefits recognized by other regulatory agencies worldwide and move to approve it.
Trey Price is a technology policy analyst for the American Consumer Institute, a nonprofit education and research organization. For more information, visit https://www.theamericanconsumer.org/ or follow us on Twitter @ConsumerPal.