The Major Obstacle Microsoft Is Currently Contending With
Microsft is being investigated by both the US Federal Trade Commission and the UK Competition and Markets Authority for potential antitrust violations that could erupt from its acquisition of gaming industry giant Activision Blizzard.
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Microsoft left the entire gaming industry speechless when it announced that it was purchasing Activision Blizzard. This is especially true given the tumultuous state pertaining to workplace culture that Activision Blizzard was in when Microsoft announced the deal. Since then, Microsoft has hit a few bumps in the road in its quest to officially acquire the company, but the latest one threatens the deal entirely.
The United Kingdom’s antitrust watchdog agency, the Competition and Markets Authority, is thoroughly scrutinizing Microsoft’s intention to purchase Activision Blizzard, reported the Wall Street Journal. The agency has concerns that the acquisition could bulldoze over any healthy competition in the video game industry. This is because Activision Blizzard is a major player in the space, developing enormously successful IPs such as Call Of Duty.
The Competition and Markets Authority may have particular concerns about how Microsoft’s purchase of Activision Blizzard will affect the continued prosperity of its most prominent gaming companies. The United Kingdom is home to the likes of both Electronic Arts and Rockstar North, among a multitude of others. Microsoft could potentially mute their voices while amplifying Activision Blizzard’s simply because it would benefit its business to do so.
In recent years, the United Kingdom has become notoriously stringent in its efforts to combat antitrust violations. For instance, it just slapped Google with a $4 billion fine for violations pertaining to its propriety apps coming pre-installed on all of its Android devices. Suffice it to say, the Competition and Markets Authority does not play around.
Furthermore, it’s not just the UK that’s investigating Microsoft’s attempt to acquire Activision Blizzard. The deal also is being investigated in the United States by the Federal Trade Commission. FTC Chairwoman Lina Khan, who initiated the antitrust investigation, has been a fierce proponent of holding tech companies more accountable for their anticompetitive maneuvers.
Whether or not Microsoft’s massive deal ultimately gets altered or even completely shot down depends on a couple of things. According to the Wall Street Journal, it would first have to depend on how the deal is classified. Specifically, whether it is classified generally or more targeted.
For instance, Activision’s largest IP is Call Of Duty. In the gaming industry, Call of Duty is classified as a first-person shooter. Its popularity is immense and far-reaching. If the watchdog agencies choose to define the deal based on this it would give Microsoft enormous control of that gaming category and this could easily be perceived as a violation of antitrust laws.
Conversely, if the agencies look at the deal from a broader perspective, Microsoft could have a better chance of skirting any infractions that could stall the deal. However, the other concern is if the acquisition would inhibit Nintendo’s and Playstation’s ability to offer Activision Blizzard games on their platforms. Right now, Call Of Duty is cross-platform, but with Microsoft as Activision’s owner, the company could turn around and make it solely an Xbox exclusive.
Sony has already expressed concerns relating to the acquisition. “We want to guarantee PlayStation gamers continue to have the highest quality Call Of Duty experience, and Microsoft’s proposal undermines this principle,” asserted Playstation CEO Jim Ryan. Nintendo has been quiet regarding the matter, however, it’s worth noting that Microsoft and Nintendo have a much more amicable relationship.
