Microsoft’s
$75 billion acquisition of
Activision Blizzard
is on the path to closing after U.K. regulators cleared the deal. It’s a relief for the tech giant but came with an admonishment which suggests British antitrust authorities are joining their American counterparts in an aggressive stance toward Big Tech.
The U.K.’s Competition and Markets Authority, or CMA, said Friday that its concerns over the threat to competition posed by the deal were resolved by
Microsoft’s
(ticker: MSFT) transfer of cloud-streaming rights for
Activision’s
(ATVI) videogames to a rival company.
However, the approval came with a caution for Microsoft and its Big Tech peers.
“Businesses and their advisors should be in no doubt that the tactics employed by Microsoft are no way to engage with the CMA. Microsoft had the chance to restructure during our initial investigation but instead continued to insist on a package of measures that we told them simply wouldn’t work,” said Sarah Cardell, chief executive of the CMA, in a statement.
The rebuke looks like the British regulator is just getting started taking on big technology companies. The CMA is claiming a win, despite having backed down from its initial stance against the deal, which led to Microsoft suggesting it would discourage innovation and investment in the U.K. However Microsoft ended up backing down too. This deal could be a sign of things to come. The CMA clearly has no problem being the only holdout against megadeals, having previously deferred to European Union regulators on merger controls.
Microsoft didn’t immediately respond to a request for comment on the statement from Barron’s early on Friday.
“The question that is left hanging… is whether this case shows a merger oversight system in the U.K. that is too dogmatic in dealing with what is a forward looking competitive assessment (especially in the case of ‘Big Tech’), or one which can be sufficiently flexible when required,” said Alex Haffner, competition partner at U.K. law firm Fladgate.
Microsoft and
Amazon’s
(AMZN) dominance of the cloud-computing market is currently under investigation in the U.K.
Microsoft’s Activision acquisition can now be closed despite continuing opposition from the U.S. Federal Trade Commission. The FTC said last month that it plans to restart an in-house trial against Microsoft over the acquisition but it doesn’t currently have the power to block the deal, after federal judges rejected its attempts to obtain a court order to do so.
Microsoft President Brad Smith said on social-media network X. formerly Twitter, that the company had crossed the “final hurdle” to closing the acquisition. Microsoft and Activision had set an extended deadline of Oct. 18 for completing the merger.
Microsoft shares were up 0.1% in premarket trading on Monday. Activision shares were unchanged having closed at $94.54 in after hours trading the previous day, just below the acquisition price of $95 a share.
Write to Adam Clark at [email protected]
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