Microsoft plans to buy gaming giant face regulators

Depending on your point of view, the computer giant Microsoft can be the hero who fights to bring more people some of the video game most popular, or the villain who seeks to end the competition in the sector.

The company that owns Xbox launched a campaign to convince regulators of the European Union (EU), United Kingdom and United States to support his offer for US$ 69,000 million dollars for Activision Blizzardowner of the hit games “Candy Crush” and “Call of Duty”.

The effort to create the world’s third-biggest gaming company by revenue began last year, but the company must now address concerns from the three regulators that it could stifle competition.

sonyconsole manufacturer PlayStationbelieves the deal will give Microsoft the power to limit rivals’ access to the popular franchise.

Microsoft argues that doing that would not make financial sense.

The hardest authority to convince might be the British Competition and Markets Authority (CMA)which in February issued a ruling that the acquisition could affect competition and consumer choice.

If the CMA blocks the purchase of Activision Blizzard, Microsoft would probably have to back off.

Removing its products for British users would mean losing a huge market, Anne Witt, a professor of antitrust law at EDHEC business school, told AFP.

“It is unthinkable that Microsoft would withdraw completely from the UK. It’s not just video games, it’s Windows.” Witt said in reference to the world’s dominant operating system.

Witt cited a recent decision by the UK regulator to order Meta, which owns Facebook, to sell animated graphics startup Giphy, saying it could affect competition.

“The CMA is the first competition agency to prohibit an acquisition of a large technology company”Witt noted.

significant losses

If the CMA takes a tougher line than Brussels on the Microsoft and Activision Blizzard deal, it would be the first time since the Brexit that the UK regulator differs from the EU in an important case.

In such a case, Microsoft could turn to the competition appeals court, where experts believe it has a realistic chance of winning.

In March, the CMA narrowed the scope of its investigation to cloud gaming, agreeing with Microsoft that if the firm made “Call of Duty” exclusive to the Xbox console, “It would generate significant losses.”

The CMA is expected to rule on April 26, while the EU must make a decision by May 22. A decision by the US Federal Trade Commission (FTC) is also pending.

“It is possible that the UK and the EU, and even the FTC, will say that it is anticompetitive”said Eleanor Fox, a professor at New York University School of Law.

“And they may disagree on the right solution, whether to stop it entirely or allow Microsoft to make some promises,” added.

The case reflects the new focus of regulators towards big tech companies, and Witt noted that the UK regulator appears to be taking a leading role among its peers.

The European Commission seems to be an easier hurdle than the UK.

Microsoft executive, Brad Smithseemed confident during his recent visit to Brussels that the EU would endorse the purchase, after the company showed evidence of its agreements with providers of cloud gaming services.

Microsoft claims that such deals will give 150 million more people access to games like “Call of Duty.”

Meanwhile, Microsoft will have to deal with the FTC, which filed an action in USA to block the acquisition, alleging that the firm had bought smaller game companies to make their games exclusive.

But Witt said the chances of the FTC convincing a US court to reject the purchase are “very low.”