Microsoft’s bid for Activision-Blizzard faces new regulatory delays in UK

Microsoft’s proposed $68.7 billion purchase of game studio Activision Blizzard is facing closer scrutiny from regulators: A month after a US regulator asked a court to halt the deal, the Competition and Markets Authority (CMA), the UK regulatory body that investigates potential anti-competitive behavior, has extended the timetable for its ongoing investigation.

The UK regulator was due to publish its findings from the phase two investigation on March 1, 2023, however, in a statement released on January 5, the CMA said this deadline had been pushed back until April 26, 2023. It noted that the extension had been granted due to the scope and complexity of the investigation, in addition to needing more time to assess the “large volume of evidence, as well as main party and third-party submissions.”

Last month, the CMA reported that after it invited the public to submit their views on the merger, the regulator received 2,100 emails, around three-quarters of which were broadly in favour and around a quarter were broadly against the proposed deal.

However, despite the extension, the CMA said that it aims “to complete the inquiry as soon as possible and in advance of this date.” According to the new timetable, it is expected that the CMA will notify Microsoft and Activision Blizzard of their provisional findings and any necessary remedies by the middle of February. Interested parties will have another opportunity to submit evidence or comments in response to the CMA’s report on its provisional findings, likely in February or March 2023, with the final report published by April 26.

Investigations around the world

It’s not just the UK regulators that are closely scrutinising this proposed merger. In December 2022, the US Federal Trade Commission (FTC) filed a lawsuit seeking to block the acquisition over concerns related to Microsoft’s track record of acquiring studios and making their games exclusive to the Xbox ecosystem.

Speaking at the time the lawsuit was filed, Holly Vedova, director of the FTC’s Bureau of Competition, said: “Microsoft has already shown that it can and will withhold content from its gaming rivals. Today we seek to stop Microsoft from gaining control over a leading independent game studio and using it to harm competition in multiple dynamic and fast-growing gaming markets.”

The case between Microsoft and the FTC is set to begin with hearings in August, after which FTC administrative law judge Michael Chappell will rule on whether the deal can go ahead. However, this could end up becoming as a lengthy process as in early January 2023 James Weingarten, a lawyer representing the FTC, said during a pre-trial hearing that there are currently no “substantive” settlement talks between the US government body and Microsoft over the proposed acquisition.

Elsewhere, the European Commission is currently engaged in a fact-finding mission for its own probe into the proposed takeover. As reported by Reuters, the European Commission sent a 91-page questionnaire earlier in the month regarding the acquisition, asking gaming companies such as publishers and developers whether the acquisition could result in the price of the publisher’s games on competing consoles increasing or games being released late on other systems.

The Commission has given itself until April 11, 2023, to decide whether to approve the deal.