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The Week
The Week
National
The Week Staff

Microsoft, Activision and the battle with competition tsars

A giant gaming deal has highlighted the shifting attitudes of global regulators

In a “striking show of leniency by a notoriously tough regulator”, the European Commission has approved Microsoft’s $69bn megadeal with games-maker Activision Blizzard, said DealBook in The New York Times – just weeks after the UK’s competition regulator threw it out. 

The eurocrats are satisfied with Microsoft’s concessions: namely a pledge to make top titles like Call of Duty and World of Warcraft available to rival gaming platforms such as Sony and Nintendo for the next ten years. The UK’s Competition and Markets Authority, by contrast, argues the Seattle software giant “could end up dominating the nascent business of cloud gaming – and that no solution apart from selling off big chunks of Activision would be acceptable”. The US has yet to formally pronounce. “Microsoft and others are left trying to navigate an increasingly complicated thicket of global rules, where regulators are coming to very different conclusions about the same issues.” Given the size of the British, European and US markets, “simply ignoring one of them is impossible”.

‘Closed for business’

“It might not be as exciting as a shoot-out” in Call of Duty, but the EU’s decision is a landmark, said Matthew Lynn in The Daily Telegraph. It’s also a sign that “something has gone badly wrong in Britain”. You can argue the finer points of the games market, but what on earth was the point of Brexit if the UK is now taking a tougher stance on regulation than Brussels? If even the EU’s competition tsar, Margrethe Vestager – no pushover – thinks the deal is okay, there are surely questions about the CMA’s stance. It looks as if we are indeed “closed for business”. 

The regulator’s new boss, Sarah Cardell, is certainly feeling the heat, said Alex Hern in The Guardian. Summoned by MPs this week, she was forced to deny that she had blocked the deal “on the orders” of the US Federal Trade Commission.

‘Down to the wire’

The alternative view is that the Commission has gone out on a limb here, said Bloomberg – and that the CMA was right. Cardell is no outlier, said the FT’s Due Diligence newsletter. America’s trust-busting duo – Lina Khan of the FTC and Jonathan Kanter of the Department of Justice – are only “just getting started” on a tough new regimen aimed at protecting workers and independent businesses, as well as consumers. “Khan and Kanter aren’t just in the game to block deals, they want to scare chief executives from even thinking about doing transactions that promote rampant consolidation.” 

Where does this leave Microsoft and Activision? With a deal set to go “down to the wire”, said Dan Gallagher in The Wall Street Journal. It could be a long, hot summer.

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