The fight for Microsoft to acquire Activision has gained even more political dimensions in the UK, where the CMA has ‘prevented’ the deal from going through.
Those air quotes are quite warranted, as it has in fact turned out that the CMA cannot prevent the deal from going through at all. But we’ll review these facts later down.
As reported by Mobile World Live, Microsoft’s president Brad Smith has scheduled a meeting with Jeremy Hunt, a UK government official with the title Chancellor of the Exchequer.
In simple English, Jeremy is the head of the UK’s treasury. He holds the same post that was once held by the likes of former prime ministers Sir Robert Peel and Sir Winston Churchill.
Of course, the Microsoft Activision deal will be a topic in this meeting, alongside discussions about the potential of AI and what it means for the country. It’s a very clear sign of how tightly knit Microsoft is with the UK government that their officials are actually talking face to face about these issues.
This meeting is also relevant because Hunt is also scheduled to meet the CMA. While we will be cautious about speculating too much on this in light of the appeal, it isn’t too hard to imagine that the CMA is feeling pressure from all over the government now to reverse their decision.
Again, for those who don’t understand the full situation, even if Microsoft faced opposition for their deal with the CMA and US FTC, it has still seen approval in close to 40 countries. That means there is enough support for the deal around the world that the two companies can just finalize their transaction.
The truth is, Microsoft went through the regulatory process and the appeals now for the benefit of the UK. As many observers have pointed out, they can easily sweep the UK out of the rug by appointing a third party to manage Activision’s affairs in the country. In that way, UK gamers, and the UK video game industry, would miss out on the benefits other regions and companies are gaining from the deal.
In fact, there is a principle behind this idea that UK should not try blocking the deal, after so many other countries accepted it. As explained by Florian Mueller here, it is the general principle of comity. We reported Microsoft invoked this principle in their letter to the Competition Appeals Tribunal.
You can read the full explanation from Florian, but what’s important here is the CMA’s rejection of the deal makes it tantamount to a rogue state, because it interferes in the affairs decided upon by other jurisdictions.
For the Microsoft – Activision deal, the CMA does this two ways. One is because nearly 40 countries have accepted the deal. Two is because both companies are based in the US.
And so another chapter in the story of this deal begins. But, if Microsoft, Activision, and the rest of us are lucky, we might be reaching close to the end.