Furious row over Microsoft’s proposed £55bn takeover of video game maker Activision – company behind Call of Duty – set to intensify as legal battle looms
Battle: Activision has attacked the CMA’s findings, saying it shows ‘the UK is clearly closed for business’
The furious row over Microsoft’s proposed £55 billion acquisition of video game maker Activision Blizzard – the company behind Call of Duty – is set to intensify as a bitter legal battle looms.
The Competition and Markets Authority stands by its decision to block the groundbreaking deal after conducting one of its most thorough investigations ever.
A team of about 30 employees has deposited more than three million documents to scrutinize the takeover, which is now on the brink of collapse.
The CMA last week released a 415-page report on Microsoft’s anticipated acquisition, which concluded it would lead to “less innovation and less choice for UK gamers in years to come.”
The watchdog was particularly concerned that Microsoft could put a stranglehold on cloud gaming – the streaming of games over the internet.
The CMA’s decision followed a year of in-depth collaboration with the two companies, which included exchanging thousands of emails, interviewing senior executives and combing through sensitive internal documents.
Activision has attacked the CMA’s findings, saying it shows ‘the UK is clearly closed for business’.
But industry sources have argued that the proposed merger between Microsoft and Activision – two US-based companies – would do little to boost investment in the UK.
Activision – whose games include World of Warcraft and Candy Crush Saga – generates just over £700m from its £6.3bn turnover in the UK.
This is the first time the CMA has blocked a Microsoft-related merger, and a rare example of the watchdog baring its teeth.
Sarah Cardell, chief executive of the CMA, said: “This decision is fully in line with the government’s investment ambition and ensures technology markets are open to competition.”
Activision and Microsoft are both expected to appeal the decision within a month.
Microsoft said, “This decision appears to reflect a lack of understanding of this market and how the relevant cloud technology really works.” Activision Blizzard has been contacted for comment.