UK Competition Regulators to Re-examine Microsoft/Activision Blizzard Deal

The United Kingdom’s Competition and Markets Authority (CMA) has initiated a new Phase 1 investigation into a restructured proposal for Microsoft’s acquisition of Activision Blizzard. This development follows the regulator's initial rejection of the merger, which had left the UK authority isolated from the international consensus that largely favored the deal. The revised proposal introduces Ubisoft as an independent third-party guarantor, granting the company rights to manage cloud gaming access for existing and future Activision Blizzard content for the next 15 years, excluding the European Economic Area.

This structural change serves as a strategic compromise for both parties. For Microsoft, the divestment of cloud gaming rights addresses the CMA’s primary regulatory concerns regarding long-term enforcement and oversight. For the CMA, the new proposal provides a face-saving mechanism to approve the acquisition while maintaining its public stance that its initial intervention was necessary. The regulator has set an October 18 deadline for the completion of this investigation.

While the CMA has cautioned that the re-examination does not guarantee approval, industry analysis suggests the deal is likely to proceed. The inclusion of Ubisoft as a neutral administrator effectively mitigates the regulatory friction that previously stalled the acquisition. By shifting the responsibility of cloud rights management, Microsoft has cleared a significant hurdle, signaling a likely conclusion to the prolonged regulatory saga. This shift reflects a broader trend of increased scrutiny over cloud gaming competition and the evolving role of third-party intermediaries in large-scale industry mergers.