People continue to find new details in the UK’s Competition and Markets Authority’s (CMA) 415-page report on its decision to block Microsoft’s acquisition of Activision Blizzard. The merger may be banned for the next 10 years.
Despite the increasing number of optimistic reports that the $68.7 billion deal will eventually be cleared in the UK, the CMA suddenly decided to block the merger last week after conducting its in-depth investigation.
In short, the regulator ruled that Microsoft’s acquisition of Activision Blizzard will harm the local cloud gaming market by giving the corporation a clear advantage in the area through worldwide hits like Call of Duty, World of Warcraft, and Diablo. One of the experts reviewing the deal noted that “it is vital that we protect competition in this emerging and exciting market.”
Given that the CMA’s document is hundreds of pages long, it is no surprise that new details emerge every day. As ResetEra user Idas pointed out over the weekend, page 336 of the final report contains information about preventing Activision and Microsoft from merging for 10 years:
Prohibition would be effected by accepting undertakings under section 82 of the Act or making an order under section 84 of the Act, prohibiting the Merger and preventing the Parties from attempting to merge for a further period: our normal practice would be to prevent a future merger between the Parties for the next ten years, absent a change of circumstances.
What it means is that if nothing changes in the cloud gaming market or Microsoft loses its appeal, it will only be able to try to buy Activision Blizzard after the period set by the regulator expires.
Shortly after the CMA blocked the merger, Microsoft announced its plans to appeal the ruling. However, the fight won’t be easy.
As pointed out by The Verge, the company will have to file a notice with the Competition Appeal Tribunal (CAT), and this process can take months. On top of that, the CMA “has won 67 percent of all merger appeals since 2010,” according to Linklaters partner Nicole Kar.
So the fate of the Activision Blizzard acquisition is now in the hands of the European Commission, which is expected to make its decision on May 22. In addition, the deal is under scrutiny in the US, where the Federal Trade Commission (FTC) prepares for an evidentiary hearing scheduled for August 2.