CMA SAYS ‘NO, THANK YOU’ TO MICROVISION
Amidst crazy busy earnings and layoffs, the big story was the UK's Competition and Markets Authority blocking Microsoft’s $69 billion acquisition bid for Activision Blizzard. Why? Microsoft failed to address competition concerns regarding cloud gaming, according to Sarah Cardell. The decision is a victory for global efforts to regulate Big Tech companies. The ruling also reflects the increasing broadening of a worldwide antitrust lens to cover emerging markets, which are being shaped to avoid monopolies by a few giant companies.
Regulators in the European Union are expected to rule on the acquisition by May 22. Microsoft has said it will appeal the UK's decision but may be forced to pay a $3 billion breakup fee to Activision if it fails. The move would mean the end of the biggest shake-up the gaming industry has seen in decades.
Overall, the decision to block Microsoft's acquisition of Activision is a significant setback for the tech beast and a major victory for those who advocate for greater regulation of Big Tech. With regulatory scrutiny of the industry continuing to intensify, it is likely that we will see more rulings like this in the future. The fact that the ruling came from the UK's Competition and Markets Authority, rather than the European Union, is also noteworthy. It suggests that countries outside the EU are taking a more proactive stance on tech regulation and are willing to use their own antitrust laws to block deals they deem anti-competitive. This could have significant implications for the tech industry, as companies will need to navigate a patchwork of different regulatory regimes worldwide to expand their businesses.
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__ DO __ Expect more rulings like this in the future. // __ DON’T __ Think the ruling doesn’t have massive implications for other tech giants, such as Amazon, Google, Apple, and Meta, as they continue to face scrutiny over their power over online commerce and communications. All will be watching this very carefully.
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