POLICY BRIEF – No. 12/2023 - Merger Policy, Competition and Innovation Leadership
12 October 2023
On 11 July 2023, a US judge denied the FTC’s motion for a preliminary injunction to stop Microsoft from completing its purchase of Activision Blizzard on the basis that the merger would not substantially lessen competition and to the contrary, there would be increased consumer access to Activision content.10 The FTC withdrew its challenge in July 2023 and the merger is now a go in the US.11 In the. [...] However, the CMA also said that the acquisition would not reduce competition in the console market.17 Microsoft o昀昀ered a similar remedy to UK authorities as it did to the EU, but the CMA did not deem it su昀케cient on the basis that they would be di昀케cult to monitor and enforce, and the rapidly 昀氀uctuating nature of the nascent cloud gaming sector means such a remedy may not take into account chang. [...] In August 2023, the CMA has con昀椀rmed its decision to block the merger, but simultaneously announced to open a new investigation into a restructured acquisition proposal Microsoft had submitted for review.19 The new remedies could include a divesture of Microsoft’s cloud gaming rights in the UK to appease the CMA o昀케cials.20 The CMA’s decision to block the acquisition of Activision by Microsoft is. [...] For example, notions that the power of a small number of technology firms is holding back innovation and growth in the UK have been quoted to defend the creation of a Digital Markets Unit (DMU) in the CMA.26 The proposed regulatory body would target large technology platform companies and potentially enable the CMA to micromanage platform services through company “code of conduct” regulations, wit. [...] Accordingly, some of the CMA’s decisions may have been motivated by the observation that business conduct of large technology companies has not been properly addressed by EU and US competition authorities due to the need to change legal doctrines in the US and the need for unanimity in the EU.