Microsoft has sent a final report to the UK’s Competition and Markets Authority (CMA) in an effort to persuade the watchdog to overturn its block on the US tech giant’s plan to acquire Activision Blizzard.
While the United States’ own regulatory body, the FTC, lost its anti-trust case against Microsoft, the UK’s own CMA blocked the deal. This resulted in an appeal from Microsoft back in May, a process which is now coming to a head.
Microsoft’s submission to the regulatory body cites Microsoft’s victory in US court, the EU’s approval of the deal, and the company’s agreement with Sony to provide Activision games on PlayStation for at least a decade.
Given that the EU only allowed the deal through with extensive caveats in the realm of cloud gaming, Microsoft has followed suit in its report to the CMA. In the submission, Microsoft stressed its “legally binding ten-year obligation… to grant royalty-free worldwide licenses to NVIDIA, Boosteroid and Ubitus” when it came to cloud gaming, and how it is unable to break or even amend these agreements “without [European] Commission consent.”
Given that the CMA was predominantly concerned with Microsoft’s potential to build a monopoly in the cloud gaming space, it comes as no surprise that the tech giant would attempt to leverage its agreements with the EU to put the UK government at ease. Though Xbox Game Pass is doubtless a great deal for the consumer, the CMA’s initial prohibition on Microsoft’s proposed acquisition of Activision Blizzard came down to fears that it would cultivate a monopoly in this space.
In its initial ruling, the CMA stated: “We have concluded that the merger would result in the most powerful operator in the fast-developing market for cloud gaming, with a current market share of 60-70%, acquiring a portfolio of world-leading games with the incentive to withhold those games from competitors and substantially weaken competition in this important growing market.”
Microsoft, therefore, has tailored its report to mollify this specific concern. Though there’s no telling for certain which way the wind will blow, it seems unlikely that the CMA will hold out in the face of international precedent. We can only hope that the caveats secured by the likes of the European Commission will be enough to protect consumers.