Modern warfare: how big business operates covertly

The Microsoft-Activision Blizzard deal shows that the UK’s entire regulatory system is under threat, writes Chris Blackhurst

No multinational is going to take the CMA seriously if they see that all you need to do is talk to the government instead (AP)

So, might prevails. Britain’s competition regulator, admired the world over for its independence and rigour, has capitulated to the world’s second biggest company. The about-turn from the Competition and Markets Authority (CMA) on Microsoft’s proposed purchase of Activision for $69bn (£53bn) marks a sad and dangerous moment.

In addition to cracking down on cartels and investigating the state of competition in different sectors, the watchdog assesses business mergers where these involve firms active in the UK. There was always going to be a row, from when the CMA ruled that the US behemoth would have to make concessions if the merger with gaming giant Activision was to proceed. It would be instructive to see what would happen if the authority stood in the way of a company of Microsoft’s size and importance.

In January 2022, Microsoft announced its largest ever deal: to buy Activision Blizzard, the video gaming group. Through its gaming division and Xbox Game Studios, Microsoft was already a major presence in the huge global computer gaming market – only behind China’s Tencent and Japan’s Sony. Yet competition regulators in most countries did not see a problem. Microsoft promised to keep Activision’s popular games, like Call of Duty, available to other platforms. That was enough for most competition regulators, including the European Commission, to allow the marriage to proceed.