UK regulator puts up big hurdle in Microsoft-Activision deal, starts Phase 2 investigation

A graphic showing Microsoft acquiring Activision Blizzard

A few days ago, we learned that UK regulator Competition and Markets Authority (CMA) has cited major antitrust concerns with Microsoft's $69 billion acquisition of Activision Blizzard. It threatened Microsoft with a more detailed Phase 2 investigation unless it managed to provide satisfactory answers to the concerns raised by the CMA. Although Microsoft CEO of Gaming Phil Spencer published a public response citing disappointment at the decision, it appears that the Redmond tech firm has failed to put the CMA's mind at ease. Today, the CMA has kicked off a Phase 2 investigation of the merger.

The CMA has announced that the Phase 2 probe has begun today and has a statutory deadline of March 1, 2023. A Phase 2 investigation is quite detailed and is led by an independent panel of experts. It also involves an in-depth review of internal documents of both Microsoft and Activision Blizzard to see how they view the competition.

The panel that will be probing Microsoft's merger is chaired by Martin Coleman. Other members include John Thanassoulis, Humphrey Battcock, and Ashleye Gunn.

Considering that this is a significantly lengthy investigation, it may throw a wrench in Microsoft's post-acquisition plans. The outcome is of paramount importance too since it's necessary if Microsoft intends to sell services and games from Activision Blizzard's portfolio in the UK.

A successful acquisition with the required regulatory approvals would see Microsoft bring multiple franchises into its portfolio such as Overwatch, Diablo, Call of Duty, World of Warcraft, Candy Crush, Starcraft, and more. Microsoft's purchase of Activision Blizzard has already been cleared in Saudi Arabia.

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