It feels like, one way or another, Microsoft will now acquire Activision Blizzard for an eye-watering $69 billion, following the outcome of US regulator the Federal Trade Commission’s failed temporary injunction attempt earlier this week. In the immediate aftermath of this week’s court ruling, the UK’s Competition and Markets Authority – the one sole regulator still seeking to block the merger – confirmed a “stay of litigation” ahead of a hearing scheduled for later this month, essentially meaning it will return to the table to discuss some form of resolution with the Redmond firm.
However, in a statement today it’s said that it “still stands” by its initial decision and that discussions with the trillion dollar titan are very much in their infancy. Microsoft has until 18th July to close the deal as part of a pre-determined deadline with Activision Blizzard, although it’s likely the two parties will extend that date now that the finish line is in sight. Nevertheless, there’s still work to be done with the CMA. Specifically, the regulator is “open” to a new investigation should the deal be restructured in a way that eases its concerns.
The CMA ruled against the merger on the basis of cloud gaming, arguing that the acquisition would “stifle competition in this growing market”. To be fair, the European Commission also flagged concerns in this area, but was satisfied with Microsoft’s decision to support rival cloud services for at least a period of ten years. A CMA spokesperson explained that while “merging parties don't have the opportunity to put forward new remedies once a final report has been issued, they can choose to restructure a deal”.
Exactly how the deal could be restructured remains to be seen, but the cynic in us believes this is merely a pantomime from the CMA in order to save face. It’s clear that the regulator was counting on support from the EC and FTC to kill this deal, but with the former giving the greenlight and the latter losing in court, we suspect it’s going to quietly back off in a way that makes it look like it enforced important concessions. Microsoft will presumably play along with the charade, of course, because in the end it’s going to get what it wants.