The UK’s Competition and Markets Authority (CMA) announced that it is investigating the anticipated acquisition by Microsoft Corporation of Activision Blizzard, Inc. The CMA stated that July 6, 2022 is the launch of the merger inquiry, and it gave notice to the parties. From the CMA:
“6 July 2022: The Competition and Markets Authority (CMA) is considering whether it is or may be the case that this transaction, if carried into effect, will result in the creation of a relevant merger situation under the merger provisions of the Enterprise Act of 2002 and, if so, whether the creation of that situation may be expected to result in a substantial lessening of competition within any market or markets in the United Kingdom for goods or services.”
CNBC reported that the U.K’s Competition and Market Authority said its investigation would consider whether the deal may harm competition – “for example, through higher prices, lower quality, or reduced choice.” According to CNBC, the CMA set a September 1 deadline for its initial decision.
CNBC also reported that Lisa Tanzi, Microsoft’s corporate vice president and general counsel, said regulatory scrutiny of the deal was to be expected, adding the company would “fully cooperate” with the CMA.
If approved, CNBC reported, the acquisition would have huge implications for the $190 billion video game industry, handing control of incredibly lucrative franchises including Call of Duty, Candy Crush and Warcraft to one of the world’s biggest tech companies.
TechCrunch reported that the United States Federal Trade Commission (FTC) is also currently investigating the Microsoft – Activision Blizzard deal. According to TechCrunch, the FTC regulators have been known “to scupper, or add provisions, to deals, as well as nod them through.”
All of this comes as Activision Blizzard faces what seems to be an ongoing series of controversies. The company was the subject of a two-year investigation by the California Department of Fair Employment and Housing, which it described as having a “‘frat boy’ workplace culture” and a “breeding ground for harassment and discrimination against women.”
TechCrunch pointed out that CEO Bobby Kotick reportedly knew about, yet failed to act, over sexual misconduct and rape allegations.
In short, Activision Blizzard is currently, and has been, a mess. While it is important to keep in mind that there are some wonderful, creative, people who work for that company, it is the inaction of the CEO and the Board that is allowing the controversy to continue. I honestly hope that the regulators allow the Microsoft – Activision Blizzard merger – if for no other reason than to give the employees a better work environment.