October 5, 2022

There is another hurdle for Activision Blizzard, the gaming giant behind “Call of Duty” that Microsoft is looking to acquire for $68.7 billion. The UK Competition and Markets Authority owns announce Formal investigation into the proposed transaction. This opens an investigation for comments from “any interested party” before the CMA decides whether to embark on a second phase, and a deeper investigation into whether the deal was anti-competitive and represented UK antitrust violations. to reply.

Areas to be evaluated include whether the deal leads to higher prices, lower quality, or lower selection in games and the gaming system.

“The CMA is examining whether this transaction, if executed, would create a relevant merger status under the merger provisions of the Enterprise Act 2002 and, if so, whether the creation of that status would be expected to reduce Competition is highly competitive within any UK market or markets for goods or services,” he notes.

If the acquisition goes ahead, it will be one of the largest ever M&A deals in technology, led by one of the world’s largest tech companies and with some of the world’s most well-known brands in digital entertainment – in addition to “Call of Duty” also including “World of Warcraft” and “Candy Crush”. So in this regard, an antitrust investigation is a fairly routine step. As the CMA notes, “The transaction is due to be reviewed by competition authorities around the world and, as usual, CMA will engage with its peers as appropriate.”

The CMA notes that its most formal criteria for evaluating investigations is that it can do so in cases where there are two or more companies that cease to be distinct and “eEither the turnover of the business acquired in the UK will exceed £70 million, or the two companies will supply / acquire at least 25% of the same goods / services offered in the UK and the merger increases the supply share.”

The US has a similar set of rules in place to trigger antitrust investigations, and it is no surprise that the US Federal Trade Commission also Currently investigating Deal. Regulators have been known to spoil deals or add provisions to them, as well as nodding them in on them.

CMA has played an important role in recent years in the fate of many business development strategies of large technology companies. He halted Nvidia’s acquisition of Arm, but nodded at Microsoft’s $20 billion acquisition of Nuance. It is also currently investigating Google’s adtech stack, and is finally looking into the country’s mobile phone duopoly like Apple and Google. Although he didn’t make much of a fuss with Facebook’s acquisition of WhatsApp several years ago, he recently ordered the company to sell Giphy. One way to get around earlier CMA regulatory concerns has seen companies scale back acquisitions, such as eBay and Adevinta when selling multiple assets to get their classifieds deals.

The antitrust probe news comes at a time when Activision Blizzard has already overcome a number of controversies, particularly over its labor practices and broader human relations.

When Microsoft’s offer to acquire Activision was first announced in January of this year, quality assurance testers at Raven Software, a division of Activision, had been on strike for nearly five weeks over the termination of some workers’ contracts and what they saw as unfair treatment by the company, in The pressure this group faced in their daily work remained. They voted to join a union in May, making it the first union at a major gaming company.

Furthermore, the company has undergone extensive public and regulatory scrutiny regarding workplace culture. The company, which generally employs about 10,000 people globally, has been the subject of a two-year investigation by the California Department of Fair Employment and Housing. In the end lawsuit against Activision Blizzard in July 2021, claiming the company’s “workplace culture” exists and calling it “a breeding ground for harassment and discrimination against women.” Furthermore, Bobby Kotik, who has served as the company’s CEO since 1991 (originally at Activision prior to the Blizzard merger), It said She learned about sexual misconduct and allegations of rape, but failed to act.

To be clear, the details of the company’s HR drama are not within the parameters of an antitrust investigation, but they do contribute to the bigger picture of a company under arms.

Those who submit their comments about the merger to the Capital Markets Authority You can do it here You have until 1 September to submit their applications.

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