Microsoft Corporation (NASDAQ: MSFT) is in focus this morning after the British competition regulator announced a provisional decision on its attempt to buy Activision Blizzard (NASDAQ: ATVI).
Microsoft-Activision deal could hurt competition
On Wednesday, the Competition and Markets Authority said the $69 billion acquisition could harm competition. It’s concerned that the deal will lift prices, minimise choices, and weigh on innovation.
The regulator is scheduled to issue its final verdict on April 26th. Today’s development, though, reiterates that it’s, so far, leaning towards blocking the merger.
It’s noteworthy here that the said acquisition is under scrutiny in European Union and the United States as well even though Microsoft has already promised not to make popular titles like the “Call of Duty” exclusive for at least ten years.
Shares of Activision Blizzard are down more than 2.0% today.
Possible remedies that could change CMA’s view
The U.K. regulator still fears that the acquisition will incentivize that Microsoft either removes Activision games or sabotage their experience on other consoles, including the PlayStation.
This could substantially reduce the competition between Xbox and PlayStation in the U.K., in turn harming U.K. gamers.
Nonetheless, the following possible remedies, it added, could change its view on the Microsoft-Activision merger:
- If Microsoft agrees to sell off the Call of Duty business
- If Microsoft agrees divest the Activision segment
- If Microsoft agrees to divest both Activision and Blizzard
Microsoft and Activision now have until February 22nd to issue a response. Last month, the tech behemoth reported a slightly lower-than-expected revenue for its second financial quarter as Invezz reported HERE.
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