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A UK's Competition and Markets Authority (ACM; UK Competition and Market Authority, in free translation) restricted the acquisition of the company Activision Blizzard from Microsoft. The decision was taken considering issues of innovation in the electronic games market, mainly in relation to the future of this area of the country's economy. the junction of Microsoft e Activision was evaluated in September 2022 and, in February of this year, the regulatory body carried out the inspection that led to the denial of the agreement. Find out in this article the most relevant repercussions on the case. 586w27
What led the CMA to block the deal between Microsoft and Activision? 6t7225
A ACM has an estimate that the company that owns the Windows has control of up to 70% of cloud gaming services worldwide. Added to this factor, the Microsoft could acquire, from the combination with the Activision Blizzard, games like Call of Duty, Overwatch, and World of Warcraft. The market's regulatory body also took into the technology company's power in the computer market, due to its global computing infrastructure in the cloud: it also owns Azure and the Xbox CloudGaming.
“Microsoft has a strong position in the cloud gaming and evidence verified by the CMA showed that Microsoft would have a commercial benefit in making Activision Blizzard games exclusive without its own service […].”
ACM
Made by the software company, the initial defense included several arguments, but, through the regulatory agency, the British government considered three important observations to block the merger: the agreement “does not broadly cover different business services of cloud gaming” (games in the cloud, in free translation), in addition to not being open to “providers who may seek to offer versions of their games on computers that do not Windows” and, furthermore, that this acquisition would lead to damage to the market and to creativity in the production of electronic games.
How are companies dealing with the lockdown? 3w3q5v
A Microsoft plans to appeal the restriction of the agreement to try to maintain its power in the games market. In this sense, the company filed a proposal with the British regulatory agency that tried to clarify the games that would be offered by Microsoft, and the company would have to show on which platforms the games would run and under what conditions they would be offered.
Before the final blocking decision, the ACM indicated that the technology organization should propose the agreement in question, with a view to a period of ten years ahead. The effort of Microsoft involved providing 2100 emails about the merger plan, as well as 3 million documents about the deal.
In a statement, the president of the Microsoft, Brad Smith, said that the company was committed to maintaining the agreement, and may still review the restriction decision. He also spoke to The Verge that the procedure between the companies involved availability of the games on more than 150 million devices and the understanding of the European agency is “defective".
“The CMA decision rejects the pragmatic way to assess the issues in relation to [commercial] competition and discourages technological innovation and investment in the UK. […] We remain committed to reinforcing these arrangements through regulatory reviews.”
Brad Smith, President of Microsoft.
Separately, the chief executive officer position (CEO) Of the Activision, Bobby Kotick, is that this news will not stop trading and, as a way of explaining the blockade, he said that the British market tends to be more restricted.
"The news was not what we wanted — but [the CMA blockade] is far from the final word on this deal."
Bobby Kotick, CEO of Activision
Microsoft has a history of big deals in the gaming market 2v4o50
Other companies have already been previously acquired by the software company: this is the case of boosteroid, da Where and the NVIDIA. They started to run several games from the xbox pc, when they entered the range of games from Microsoft. Still in December 2022, the company that owns the search engine Bing also got the Nintendo, giving it even more power to run games from competing brands on its own cloud gaming service.
If the software company had managed to sign this acquisition with Activision, the deal would be worth US$68,7 billion (almost R$350 billion). The event would be historic, as it would be the largest negotiation involving companies that invest in electronic games. Despite this, the negotiation between Microsoft e Activision has been approved by regulatory bodies in Saudi Arabia, Chile, Serbia, Japan, South Africa and also in Brazil.
Furthermore, there is an expectation that the reputation as a major player in the games by the company remains firm, after the final word of the European Union (UE) about the agreement. A UE will analyze the case and issue an opinion on the probable date of May 22.
What do you think will happen in a month? Have an opinion on blocking? Tell us here in the comments here at showmetech!
See also:
Source: The Verge | Reuters | UK Government
reviewed by Glaucon Vital in 26 / 4 / 23.
