Report: Microsoft expects UK to block Activision merger deal [Updated]
<strong>Update, February 7: A Microsoft spokesperson pointed Ars Technica to a statement that has been appended to the New York Times report: "Microsoft said that it believes it has a strong case in Britain and it has not predetermined, nor been advised by its lawyers, that the merger will be blocked."=
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A British bulldog with teeth
The UK's Competition and Markets Authority first challenged Microsoft's proposed acquisition last July, before escalating to an in-depth "Phase 2" inquiry in September. In announcing that move, the UK regulator raised concerns that the deal could lead to a "substantial lessening of competition" in the markets for game consoles, subscription gaming services, and cloud gaming.
The Commission recently issued an eight-week extension to the statutory deadline for finishing that investigation, pushing that final date to April 26. But Bloomberg reports that preliminary findings in that inquiry are expected to be published as early as this week.
After its creation about ten years ago, the UK's Competition and Markets Authority rose to greater international prominence following Britain's contentious exit from the European Union. Since then, the CMA has been an international leader in stopping anti-competitive mega-mergers. And a negative decision from the CMA could be especially damaging for Microsoft and Activision, since the UK's Competition Appeal Tribunal rarely overturns the regulator's decisions.
While the CMA decision technically couldn't be applied internationally, any move that prevented a merged Microsoft/Activision from operating in the UK would likely sour the deal in other jurisdictions.
The EU, meanwhile, reportedly issued its formal statement of objections to Microsoft this week, giving the company several weeks to respond.