John Paul M. Joaquin Tech 04.27.2023 08:Apr AM EDT

CMA Defends Blocking Microsoft’s Acquisition Deal Despite Corporate Onslaught

Microsoft is not pleased with the decision of the UK's antitrust regulator.

The company recently released a statement condemning the UK's Competition and Markets Authority's (CMA) decision to block its $68. 7 billion acquisition of Activision, forcing the regulator to defend its decision to do so.

The CMA recently announced it had to block Microsoft's acquisition of Activision due to the company's dominance over cloud gaming services.

Microsoft-CMA Feud details

Microsoft president Brad Smith said in an interview with the BBC's Wake up to Money program that the company was "very disappointed" about the CMA's decision to ultimately block its acquisition deal with Activision and that doing so is bad for the UK in general.

He said that the CMA's decision does more than shake Microsoft's confidence in the future of the opportunity to grow a technology business in the country than it's ever confronted before and that it sent a clear message that the EU is a more attractive place to start a business than the UK.

"If the government of the UK wants to bring in investment, if it wants to create jobs... it needs to look hard at the role of the CMA, the regulatory structure in the UK, this transaction, and the message that the UK has just said to the world," Smith said, per a Reuters report.

He added that the CMA's decision disappointed, shocked, and shook people's confidence in the country's technology, saying that Apr. 26 is probably "the darkest day" in Microsoft's four decades in the UK.

CMA Chief Executive Sarah Cardell countered Smith's comments about the regulator's decision, saying that the CMA's decision was made with the people's, businesses', and the UK's economy's best interests in mind, not merging firms with commercial interests.

Cardell also mentioned that its final decision on Microsoft's acquisition means that big and small firms can still compete in rapidly growing gaming and cloud gaming markets, showing how important it is to support competition in the UK, which is open for business.

Furthermore, Cardell said she desires to create an environment in the UK where a whole host of different companies compete effectively, can grow, and innovate.

The CMA's Final decision

The CMA recently decided to block Microsoft's acquisition of Activision in its final decision because of its concerns about cloud gaming and due to the proposals it made having significant shortcomings that require mandatory oversight from the government agency itself.

The watchdog explained that Microsoft's strong position on cloud gaming services and the evidence it had showed that Microsoft would find it commercially beneficial to make Activision's games exclusive to its cloud gaming service.

Meanwhile, the remedies Microsoft proposed for its concerns are only "behavioral" because they want to regulate the behavior of the businesses involved in a merger, requiring them to act in a way that may be contrary to its commercial incentives.

Microsoft intends to appeal against the decision, with Smith saying that Microsoft remains committed to the acquisition deal it made with Activision, per a BBC report.

Tags microsoft Activision Activision Blizzard CMA Competition and Markets Authority xbox Microsoft acquisition deal Microsoft activision acquisition deal