Britain’s competition regulator announced on Friday that it has extended by six weeks the deadline for reviewing Microsoft’s acquisition of video game maker Activision Blizzard.
The extension will give the regulator more time to consider the parties’ proposals to address their concerns after temporarily halting the campaign to block the deal.
“The investigation group has decided to extend the six-week period… because it believes there are special reasons for doing so. The revised period will therefore end on 29 August 2023,” according to the UK Competition and Markets Authority. He said on Friday.
The UK regulator has been a staunch opponent of Microsoft’s $69 billion purchase of Activision Blizzard, broadly blocking the deal in April over competition concerns in the burgeoning cloud gaming market.
CMA appeared to tone down its tone earlier in the week, suggesting it was ready to resume talks with the Redmond-based tech giant. The weakened position came after a judge rejected the US Federal Trade Commission’s attempt to block the deal.
“We stand ready to review any proposal by Microsoft to restructure the transaction to address the concerns outlined in our final report,” a Capital Markets Commission spokeswoman told CNBC via email on Tuesday.
The CMA’s concerns center on the possibility of Microsoft making Activision games exclusive to its own platform, as the tech giant sets its sights on the growing cloud gaming market — a technology that allows users to play games remotely from servers to effectively stream them. For example Netflix viewers stream a movie.
Numerous franchise offers from Microsoft to CMA have yet to come to fruition. This includes offers to license certain Microsoft games and Activision to other cloud game providers. However, the CMA flatly rejected these proposals, effectively saying they would be difficult to implement and would not do enough to protect competition in the cloud gaming market.
Now Microsoft and Activision must come up with new, comprehensive proposals to address the CMA’s concerns. Analysts told CNBC that the code includes expanded licensing deals or even a possible spin-off of the UK’s cloud gaming business.
In February, CMA responded with a notice of possible remedial action, which included selling its core Call of Duty game unit and divesting a portion of Activision Blizzard’s business. At the time, Microsoft said it wasn’t possible.
Freitag, Bloomberg Citing people familiar with the matter, it reported that Microsoft may sell some cloud-based market rights for UK games to another company in order to comply with the CMA.
The deal also faced opposition in the US, but appeared to gain traction in the US after the US District Court for the Northern District of California ruled in favor of the two companies earlier this week. Since then, the U.S. Federal Tracking Commission has appealed Wednesday’s decision to deny a request for an injunction that would have prevented the deal from going through.
