The CMA’s decision not to approve Microsoft’s takeover of Activision is a real blow to Microsoft’s business. And if the tone is rather cordial in public communications, it is not necessarily the same behind the scenes.
Activision is very upset against the CMA
Following the announcement of the CMA, it was the chairman of Microsoft who took the floor yesterday to express his regret that the agreement with Activision had not been approved by the British antitrust authorities. In a very cordial tone, Microsoft clarified that it would appeal, while regretting a lack of understanding of the market by the regulator, and particularly in the cloud segment.
On the side of Activision on the other hand, the tone is a little more virulent. Bobby Kotick, CEO of the creator of Call of Duty, sent a communication to his employees stating that if the CMA’s decision were upheld, it would “stifle investment, competition and job creation across the whole of the UK gaming industry.
The Activision boss had already violently tackled the United Kingdom last February in reaction to a declaration by the Chancellor, Jeremy Hunt, that he wanted to make the United Kingdom “the Silicon Valley of Europe”. Faced with the reluctance of the CMA to validate the takeover already at the time, Bobby Kotick had then declared that blocking the deal could, on the contrary, have the effect of transforming the United Kingdom into a valley of death (Death Valley) . Atmosphere.
Already at the time, Bobby Kotick was talking about an impact on the country’s jobs, but an Activision representative went further on the microphone of the BBC. “The CMA report contradicts the ambitions of the United Kingdom to become an attractive country for the creation of technology companies”he said, recalling the statements of the big boss a little earlier this year.
The report’s findings do a disservice to British citizens, who face an increasingly bleak economic outlook. We will reassess our growth plans for the UK. Global innovators big and small will take note that, for all its rhetoric, the UK is clearly out of business.
By evoking a reassessment of its growth plans in the United Kingdom, Activision clearly threatens the CMA to divest the country in favor of other territories. It is difficult to assess the impact of such a threat, but chances are that the intimidation does not really allow the construction of a constructive dialogue.
And now ?
In its conclusions, the CMA put aside the console market which does not seem to be problematic in this case, and instead put cloud gaming in the forefront. According to the organization, Microsoft’s position in this market would be problematic if the deal were to be validated.
Microsoft already enjoys a strong position and an edge over other competitors in the cloud gaming space, and this deal would reinforce that advantage by giving it the ability to undermine new and innovative competitors.
Microsoft did present plans to address the CMA’s concerns, but they were deemed ineffective. “Cloud gaming needs a free and competitive market to drive innovation and choice. The best way to achieve this is to allow the current competitive dynamics of cloud gaming to continue to do their job.”
While waiting for the follow-up to Microsoft’s appeal in the United Kingdom, it is the decision of the European Commission that is pending. This must take place on May 22 at the latest.
