UK competition regulator finds Microsoft-Activision deal ‘could raise competition concerns’

The United Kingdom’s antitrust regulator is concerned that Microsoft’s blockbuster purchase of Activision Blizzard could create a monopoly in the burgeoning cloud gaming space. The Competition and Markets Authority (CMA), which began investigating the deal in July, says it is not yet reassured by the promises Microsoft has made to close the deal. It believes that, once Activision becomes part of Microsoft, the Xbox maker will “remove control of popular games such as Call of Duty and World of Warcraft‘ to ‘harm rivals’ by banning them from access to popular titles. Microsoft has already publicly pledged not to hoard exclusive articles (and said Actiblizz’s library isn’t anyway), but sweet words haven’t reassured officials.

In a statement, it said it gave Microsoft and Activision five days to submit proposals that allay their concerns. However, if those are not acceptable, the office will open a lengthy “Phase 2” investigation involving an independent panel to investigate the deal further. That will likely delay the deal’s completion, which would then only leave its mark if regulators were convinced the deal would not cause a “substantial reduction in competition.” It’s likely that whatever happens, Microsoft will have to work hard not to use its growing power to hurt other companies in the space by stripping them of key franchises.

Microsoft’s gaming chief Phil Spencer has already responded on the announcement, confirming the earlier promise not to pull Call of Duty from PlayStation, for example. Spencer pointed out the cross-platform appeal of Minecraft, a title that Microsoft purchased in 2014, as proof of the company’s good faith. Activision CEO Bobby Kotick published a open letter to employees and said the company will “fully cooperate” with regulators, who are taking “appropriate” measures to ensure there are no risks to competition.