Microsoft deal to buy Activision gets reboot from British regulators

In an unusual move, the $69 billion deal is being reconsidered by the UK's Competition and Markets Authority

An advertisement for the video game Call of Duty. British regulators are taking a second look Microsoft's $69 billion deal to buy videogame maker Activision. AP

Microsoft's $69 billion (£54 billion) deal to buy the games maker Activision is getting a second chance to pass the scrutiny of the UK's anti-trust authorities, after some of the conditions were substantially altered.

In a rare move by the Competition and Markets Authority (CMA), the watchdog is reconsidering the deal, after Microsoft and Activision, which created Call of Duty, proposed major changes.

Essentially, under the revamped deal, Activision’s cloud streaming rights outside the European Economic Area will be sold to the French gaming company, Ubisoft.

“This is not a green light,” Sarah Cardell, head of the CMA, said. “We will carefully and objectively assess the details of the restructured deal and its impact on competition, including in light of third-party comments.”

In its quest for global regulatory approval, the deal has had more twists and turns, been down more dark alleys and seen more action than a session on Call of Duty.

The red light from the CMA in April took the wind out of the deal's sails, as did the Federal Trade Commission’s court challenge in the US.

But now things seem brighter – Microsoft beat that challenge and the EU cleared the deal with some tweaks back in May.

Men are dressed as soldiers to promote the video game Call Of Duty Black Ops 3. Obtaining global regulatory approval for a merger has been quite the battle for Microsoft and Activision. Reuters

'Critically important'

Microsoft asked the CMA to have a second look at the deal in July, because it argued the situation had “materially changed,” given the US court win and the subsequent arrangement it came to regarding the licensing of Activision's blockbuster title Call of Duty to rival Sony.

“Under the restructured transaction, Microsoft will not be in a position either to release Activision Blizzard games exclusively on its own cloud streaming service – Xbox Cloud Gaming – or to exclusively control the licensing terms of Activision Blizzard games for rival services,” Microsoft said.

The deadline for the CMA's new investigation is 18 October.

“We will be carefully scrutinising this new deal,” Ms Cardell told the BBC.

“And we will be seeking input from third parties, from companies who have an interest in this deal, before we reach a final decision,” she added.

“It's critically important in this new area of cloud gaming that this market remains open to effective competition; that gamers can benefit from innovation and choice.

"That's been our priority throughout this process and it remains our priority as we go through this new stage of investigation."