Weeks after the Competition and Markets Authority (CMA) blocked Microsoft’s merger of Activision Blizzard, it’s gone a step further in halting the deal. As of May 5, the UK regulator temporarily banned the Xbox maker from “acquiring an interest” in the popular game publisher.
Under the ban, neither party can make moves to acquire the other, either as a larger entity or through one of its various subsidiaries, without prior written consent from the CMA. Similarly, neither of them can “hold an option to acquire an option” that they can move on later, should the CMA end its order.
With this, the CMA puts another dent in Microsoft’s almost year-long effort to acquire Activision Blizzard. The timing is even more potent, given how close we’re getting to July 18, the deadline both companies previously believed the deal would close by.
In its layout of the interim order’s scope, the CMA explicitly states that “no act or omission shall constitute a breach of this Order, and nothing in this Order shall oblige Microsoft or Activision to reverse any act or omission, in each case to the extent that it occurred or was completed prior to the commencement date.”
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At the time of its decision in late April, the CMA said it was worried about the deal’s affect on UK consumers. The deal, said the regulator, would end innovation and “alter the future of the fast-growing cloud gaming market.”
Following the ruling, neither Microsoft or Activision Blizzard took it especially well. Activision Blizzard CEO Bobby Kotick called it an “irrational decision,” and Microsoft president Brad Smith said it was the “darkest day” in the 40-year relationship between it and the United Kingdom.
Even if the CMA is putting up a fight against the merger, the two developers may soon get a reprieve. Earlier in the week, sources speaking to Reuters claim the European Commission plans to approve the merger.
That approval is reportedly set to be revealed next week on May 15. It’s alleged that the Commission found its antitrust concerns addressed as Microsoft has been on a recent spree of licensing deals related to cloud gaming and Activision Blizzard’s Call of Duty series.