Speaking about Microsoft’s controversial Activision-Blizzard acquisition proposal, CEO Bobby Kotick has expressed his concerns regarding regulatory action, saying that the UK will become “Death Valley” if the Competition and Markets Authority (CMA) shuts the deal down in the region. His comments come as the CMA is expected to publish its provisional findings later this week.
Since Microsoft announced its plans to acquire Activision-Blizzard in a cash deal worth near $70 billion last January, a number of regulatory bodies around the world have been deeply scrutinizing the anti-competitive potential of the deal. The UK’s CMA moved their investigation of the acquisition proposal into Phase 2 in October, and is expected to publish its provisional findings this week. Meanwhile, in the US, Microsoft and the Federal Trade Commission (FTC) are embroiled in a legal battle over the future of the acquisition.
As one of the proposal’s foremost proponents, Activision-Blizzard CEO Bobby Kotick expressed his criticism of the regulatory opposition to the deal:
Whether it’s the FTC or the CMA or the EU, they don’t know our industry. […] I don’t think they fully appreciate that it’s a free-to-play business that the Japanese and Chinese companies dominate. (Sony and Nintendo) have these huge libraries of intellectual properties. […] I think they’re a little confused about where the competition is today: the best companies in the world are companies like Tencent and ByteDance. These are companies that have protected markets, (while) we struggle to enter the Japanese and Chinese market without joint venture partners. The competition isn’t American or European companies; it’s those companies in Japan and China.
Post-Brexit UK is probably the first country where you’re seeing the real, severe consequences of a recession. […] I think you would want to embrace a transaction like this (in the UK) where you’re going to see job creation and opportunity. It really isn’t, at all, about whether it’s Sony or Microsoft’s platform; it’s really about the future of technology. I think Rishi Sunak has said that (the UK) would like to be the Silicon Valley of Europe, […] and if deals like this can’t get through, they’re not going to be Silicon Valley. That’ll be Death Valley.
The CMA will likely publish its provisional findings from the review of the acquisition later this week, along with possible remedies. A late February to early March window will see response hearings from all concerned parties if required, followed by a final March 2023 deadline for the submission of all parties’ responses. A statutory deadline of April 26, 2023 has been set for the publishing of the CMA’s final report.
Source: CNBC