The CMA says it stands by decision to block Microsoft-Activision deal despite EU approval

This afternoon, the European Commission officially approved Microsoft's proposed acquisition of Activision Blizzard, noting that the remedies offered by Microsoft should be enough to do away with competition concerns. Now, the UK's Competition & Markets Authority has responded, saying it stands by its initial decision. 

In a series of tweets posted in the hour or so after the EU's decision became public, the CMA says that “Microsoft's proposals accepted by the European Commission would allow Microsoft to set the terms and conditions for this [cloud gaming] market for the next 10 years”. The CMA also notes that the EU's decision would require “ongoing regulation of the games Microsoft sells, the platforms to which it sells them, and the conditions of the sale”.

They would replace a free, open and competitive market with one subject to ongoing regulation of the games Microsoft sells, the platforms to which it sells them, and the conditions of sale. [4/5]

— Competition & Markets Authority (@CMAgovUK) May 15, 2023

Microsoft and the EU had agreed on a major remedy for the cloud gaming market, offering up a completely free license to all cloud gaming providers and gamers to play all current and future Activision games on whatever streaming service they want. While the CMA claims the deal would harm cloud competition, the EU says the exact opposite, noting that the free license would open up the cloud market and promote competition rather than harming it.

It seems to be a stark difference of opinion between the two regulators, but it is worth noting that the EU has a stronger track record when it comes to understanding and actively engaging in the tech world, while the UK government's reputation in that regard is not very good. The CMA says it stands by its decision to block the deal, but nonetheless, Microsoft and Activision will be filing appeals. Given that the CMA already made provably wrong calculations at various stages during its investigation, there is a high chance Microsoft has some good ammunition for its appeal.

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KitGuru Says: Interestingly, the European Commission's press release did not make any mention of a ten-year time gate on the freely available license to streamers. This seems to be a new remedy, separate from the many 10-year deals Microsoft signed with console makers and streaming providers. With that in mind, the CMA's comments here might be flawed from the jump. 

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