Update, February 7: A Microsoft spokesperson pointed Ars Technica to a statement that has been appended to the New York Times report: “Microsoft said that it believes it has a strong case in Britain and it has not predetermined, nor been advised by its lawyers, that the merger will be blocked.”
Original story: Microsoft’s legal team now expects Britain’s Competition and Markets Authority to formally oppose its long-planned $69 billion merger with Activision Blizzard. That’s according to “four people briefed on the matter” cited many paragraphs deep in a New York Times report about the direction of globalized antitrust regulation.
Microsoft expects the European Union’s separate “in-depth” investigation into the deal to be more amenable to “potential remedies” that would allow it to go forward, according to the Times. As those processes play out on the other side of the Atlantic, the US Federal Trade Commission seems content to limit its response to an administrative lawsuit rather than issuing an emergency injunction that could have stopped the deal from moving forward.
A British bulldog with teeth
The UK’s Competition and Markets Authority first challenged Microsoft’s proposed acquisition last July, before escalating to an in-depth “Phase 2” inquiry in September. In announcing that move, the UK regulator raised concerns that the deal could lead to a “substantial lessening of competition” in the markets for game consoles, subscription gaming services, and cloud gaming.
The Commission recently issued an eight-week extension to the statutory deadline for finishing that investigation, pushing that final date to April 26. But Bloomberg reports that preliminary findings in that inquiry are expected to be published as early as this week.
After its creation about ten years ago, the UK’s Competition and Markets Authority rose to greater international prominence following Britain’s contentious exit from the European Union. Since then, the CMA has been an international leader in stopping anti-competitive mega-mergers. And a negative decision from the CMA could be especially damaging for Microsoft and Activision, since the UK’s Competition Appeal Tribunal rarely overturns the regulator’s decisions.
While the CMA decision technically couldn’t be applied internationally, any move that prevented a merged Microsoft/Activision from operating in the UK would likely sour the deal in other jurisdictions.
The EU, meanwhile, reportedly issued its formal statement of objections to Microsoft this week, giving the company several weeks to respond.