Microsoft Corporation (NASDQ:MSFT) inched up in pre trading session on Tuesday as the firm recently $75 billion acquisition of video game maker Activision Blizzard, Inc. (NASDAQ: ATVI) has been threatened with an in-depth UK rivalry probe that could derail the landmark deal . Despite the fact next week US tech giant is going to address antitrust concerns.
The merger, according to the UK’s competition commission, would damage Sony and other game console manufacturers while posing a danger to open competition in future industries including gaming subscription services and cloud gaming. Microsoft was given five days to come up with initiatives that would allay its concerns or else face a thorough investigation.
The obstacle identifies the problems Microsoft would have to work around in order to complete its largest-ever merger and makes the Competition and Markets Authority the first international antitrust authority to raise concerns about the agreement. Following a comparable first examination, the CMA objected to another massive tech tie-up last year, Nvidia’s Corporation (NASDAQ:NVDA) $40 billion acquisition of chip manufacturer Arm. This set the stage for international regulatory action that ultimately resulted in the deal being scrapped.
Microsoft would become the third-largest gaming firm in terms of revenues behind China’s Tencent and Japan’s Sony after the Activision acquisition. The CMA cautioned that doing so would place Microsoft in a position where it might hurt competitors by denying them access to Activision games or by them access on significantly less favorable conditions.
The CMA stated that it would conduct a “phase 2 examination” to look into the deal if its concerns were not resolved by Microsoft offering adequate remedy suggestions within five working days. An impartial panel would have to thoroughly investigate the transaction and weigh its effects on the market.
Brad Smith, president and vice-chair of Microsoft, stated: “We’re prepared to engage with the CMA on the next stages and address any issues it may have. Sony, the market leader, claims to be concerned about Call of Duty, but we have stated that we are dedicated to having the same game accessible on both Xbox and PlayStation on the same day. Instead of limiting access to gaming, we want more people to have it.
Additionally, it has vowed to keep any online game stores it operates operational, providing competing game developers an equal opportunity to find a market.
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