The boss of the competition regulator today issued a fierce missive to Microsoft as it finally cleared the tech giant’s blockbuster merger with Activision, ending a months-long battle to get the deal over the line.
Sarah Cardell, CEO of the Competition and Markets Authority, which had blocked an earlier proposal for the $69 billion merger over cloud gaming competition concerns, said: “We take our decisions free from political influence and we won’t be swayed by corporate lobbying.
“Businesses and their advisors should be in no doubt that the tactics employed by Microsoft are no way to engage with the CMA.â¯Microsoft had the chance to restructure during our initial investigation but instead continued to insist on a package of measures that we told them simply wouldn’t work. Dragging out proceedings in this way only wastes time and money.”
Microsoft’s fresh merger proposal stripped out ownership of Call of Duty maker Activision’s cloud streaming rights, which were sold to rival Ubisoft. Cardell said the change “made sure Microsoft can’t have a stranglehold over this important and rapidly developing market.”
Microsoft previously blasted the CMA over its decision to block its deal with Activision after a number of other major global regulators, including the European Union, gave it unconditional approval.
“This decision, I have to say, is probably the darkest day in our four decades in Britain,” Microsoft president Brad Smith said in an interview with the BBC. “It does more than shake our confidence in the future of the opportunity to grow a technology business in Britain than we’ve ever confronted before.”
The firm is understood to have faced a $3 billion break-up fee if the deal had fallen through.
An Activision spokesperson said: “The CMA’s official approval is great news for our future with Microsoft, and we look forward to becoming part of the Xbox Team.”
Ben Barringer, equity research analyst at Quilter Cheviot, said: “After many months of regulatory rumbling, the Activision-Microsoft saga can finally be put bed and the gaming world can move on. For Microsoft, this deal has ended up without the cloud gaming rights to Activision titles. This is ultimately a fairly big deal given the roster of games Activision has, such as Call of Duty, Overwatch and Candy Crush – big franchises with strong consumer loyalty.
“Ultimately, Microsoft will see this now as the opportunity to move forward with its cloud gaming strategy, and with or without Activision titles, it will still look to dominate the space and leverage the Xbox brand.”
