The UK Competition Authority’s decision to block a $69bn (£55bn) takeover that would have created one of the world’s largest gambling groups has sparked a major controversy over whether the UK is “closing things up”.
The Competition and Markets Authority (CMA), among other things, vetoed Microsoft’s takeover of game maker Activision Blizzard. candy crush AND Dutya potentially fatal blow to the global deal.
The CMA said it prevented the deal due to competition issues in the cloud gaming sector and predicts the global market will be worth £11bn by 2026.
Martin Coleman, chairman of the independent panel that conducted the study, said: “Microsoft already has a strong position and advantage over other competitors in the cloud gaming space, and this deal will strengthen that advantage and enable it to expand into new and innovative areas.” ways.” to resist competitors. to undermine. “.
“No other cloud gaming operator has this combination of strengths, which partly explains Microsoft’s current UK market share of 60 to 70 percent,” the CMA said in a statement.
Mr. Coleman said that Microsoft’s plans to address the issues raised by the CMA “have been ineffective in addressing our concerns and have replaced competition with ineffective regulation in a new and dynamic marketplace.”
This decision angered both companies. Brad Smith, president of Microsoft, one of the largest software companies in the world, said they remain committed to the agreement and are appealing the decision.
“The CMA decision rejects a pragmatic approach to tackling competition issues and hinders technological innovation and investment in the UK,” Smith said.
“We have already signed agreements to bring popular Activision Blizzard games to an additional 150 million devices, and we remain committed to strengthening these agreements through regulatory action.”
He accused the CMA of having a “poor understanding” of the gaming market. Microsoft has previously said the deal is important to its mobile gaming ambitions.
Activision Blizzard went one step further, saying the CMA report ran counter to the UK’s ambition to be “an attractive place to start tech companies”.
“The findings of the report are doing a disservice to British citizens who are facing a deteriorating economic outlook.
“We are reviewing our UK growth plans. Global innovators big and small will note that despite all this rhetoric, the UK is clearly not open to business.”
In a later message to Activision employees, CEO Bobby Kotick wrote, “This is not the news we wanted, but it is far from the final word on this deal. We are confident because the facts are on our side: this deal is good for competitors.”
He stated that if the CMA decision remains in place it will discourage investment, competition and job creation in the UK gaming industry.”
EU antitrust authorities will decide on the acquisition next month, and the US Federal Trade Commission is expected to conduct an investigation in the summer.
The CMA’s decision comes as a surprise after worries over the impact of the deal on the console market, led by market leader Sony’s PlayStation, faded last month.
The UK regulator’s decision “came as a surprise to most people” and adds to global uncertainty about the deal, said Liam Dean, a games industry analyst at research firm Omdia.
“The market is big enough to shake things up in terms of Microsoft and Activision, but it will be much worse if they also get the wrong decision from the European Commission in a couple of weeks,” he said.
Source: I News
I am Moises Cosgrove and I work for a news website as an author. I specialize in the market section, writing stories about the latest developments in the world of finance and economics. My articles are read by people from all walks of life, from investors to analysts, to everyday citizens looking for insight into how news will affect their finances.