Surrounded on All Sides: MS Acquires Blizzard Amid UK 'Corporate Breakup' Demands (Comprehensive)

Final Decision on Merger Ban by the End of April

[Asia Economy Reporter Yujin Cho] The UK regulatory authority, which is reviewing the antitrust aspects of Microsoft's (MS) acquisition of Activision Blizzard, has demanded the company to split as a condition for the merger. Both companies are also facing antitrust lawsuits from the U.S. government aimed at blocking the merger. MS's ambition to expand its business territory into the entertainment sector and increase its dominance has suffered another setback.

The UK Competition and Markets Authority (CMA) proposed as a precondition for merger approval that Activision Blizzard's publishing division and entertainment division be separated into independent entities and sold off, the Wall Street Journal (WSJ) reported on the 8th (local time).

WSJ reported that selling the publishing division, which holds the rights to the blockbuster game and the key asset of this deal, "Call of Duty," would effectively reduce the value of the merger to zero, making it unlikely that MS would accept such a condition.

The CMA is also said to have proposed measures to restrict MS from exclusively loading Call of Duty on its own console game Xbox and to force it to supply competitors such as Sony (PlayStation) as well.

The CMA is expected to make a final decision on whether to approve the merger around the end of April. WSJ predicted that if the CMA rules to block MS's acquisition of Activision Blizzard, MS will appeal, and it could take months or even years to reach a final conclusion.

Since the announcement of the MS and Activision Blizzard merger, the CMA began a preliminary investigation in July last year and a detailed investigation in September last year, notifying MS to prepare corrective measures regarding antitrust behavior and reduced competition. On this day, the CMA stated, "This deal could lead to unfair competition and result in higher prices, fewer choices, and less innovation for users," and said it would demand remedies to alleviate such concerns.

[Image source=AP Yonhap News]

In the United States, the acquisition approval is also stalled. Along with Apple, Google, Amazon, and Meta, MS has become a target of antitrust regulations pushed by the Joe Biden administration and Congress. The U.S. Federal Trade Commission (FTC) has filed an antitrust lawsuit against both companies to block the merger. The FTC's view is that MS's intention behind acquiring Activision Blizzard is to secure game intellectual property (IP) and form a monopoly in the game distribution market based on it.

During the lawsuit, the FTC cited MS's past behavior when it acquired ZeniMax Media, where MS blocked and pressured competitors from supplying games, arguing that MS's control over Activision Blizzard's IP could hinder competition in quality, price, and innovation. MS is opposing the lawsuit filed by the FTC with objections instead of proposing remedies, escalating the legal battle into a full-scale confrontation.

Having enjoyed a monopoly position in the PC market, MS entered the console game market late in 2001 and has been growing its market share rapidly by expanding its size and competitiveness. If the big deal of MS acquiring Activision Blizzard for $68.7 billion (approximately 86.63 trillion KRW) is finalized, MS will stand tall as one of the global top three game companies alongside China's Tencent and Japan's Sony.

This content was produced with the assistance of AI translation services.