Acquisition Blocked by US Regulations Faces Collapse in UK as Well
[Asia Economy Reporter Yujin Cho] The UK regulatory authority, which is examining whether Microsoft's (MS) acquisition of Activision Blizzard constitutes an antitrust issue, has demanded the company be split as a condition for the merger.
The UK Competition and Markets Authority (CMA) reportedly proposed, as a prerequisite for approving the acquisition, that Activision Blizzard's publishing division and entertainment division be separated into independent entities, according to the Wall Street Journal (WSJ) on the 8th (local time).
The WSJ reported that selling the publishing division, which holds the rights to the blockbuster game and MS's key target, "Call of Duty," would effectively reduce the value of this merger to zero, making it unlikely that MS would accept such a condition.
The CMA is also said to have proposed measures to restrict MS from exclusively loading Call of Duty on its own console game service, Xbox, and to force MS to supply it to competitors such as Sony (PlayStation).
The CMA is expected to make a final decision on whether to approve the merger by the end of April. If the CMA disapproves MS's acquisition of Activision Blizzard, WSJ anticipates that MS will appeal, potentially prolonging the final conclusion by several months or even years.
Since the announcement of the MS and Activision Blizzard merger, the CMA began a preliminary investigation in July last year and a detailed investigation in September. The CMA notified MS to prepare corrective measures regarding antitrust behavior and reduced competition. However, as MS failed to present sufficient measures to comply with competition regulations, the risk of the acquisition falling through has emerged.
MS is also facing obstacles to the approval of the Activision Blizzard acquisition in the United States. Alongside Apple, Google, Amazon, and Meta, MS has become a target of antitrust regulations pushed by the Biden administration and Congress. The US Federal Trade Commission (FTC) has filed an antitrust lawsuit against MS to block the acquisition. The FTC views MS's strategy as aiming to secure game IP through the acquisition and establish a monopoly in the game distribution market.
During the lawsuit, the FTC cited MS's past conduct when acquiring ZeniMax Media, where MS blocked and pressured competitors from accessing games, arguing that MS's control over Activision Blizzard's intellectual property (IP) could hinder competition in quality, price, and innovation. MS has responded to the FTC's lawsuit with objections instead of proposing remedies, escalating the legal battle into a full-scale confrontation.
Having enjoyed a monopoly position in the PC market, MS entered the console game market late in 2001 and has since expanded its market share rapidly by growing its scale and competitiveness. If MS's $68.7 billion (approximately 86.63 trillion KRW) acquisition of Activision Blizzard is finalized, MS will stand alongside China's Tencent and Japan's Sony as one of the top three global gaming companies.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
