Competition Markets Authority
Thank you for your interest in the Microsoft / Activision Blizzard merger investigation. This page sets out information on the process we follow and will be updated as our investigation progresses.
How a Phase 2 merger investigation works
A Phase 2 merger goes through the following key stages:
Our Phase 1 investigation
We first carry out an initial review of the deal to determine whether there are any competition concerns. This is known as our Phase 1 investigation.
If we arent concerned about the deal, we clear it. But if we have competition concerns that are not solved during our initial review, we carry out a more in-depth investigation, known as Phase 2.
Phase 2 investigation begins
At Phase 2, we build on our work at Phase 1 and gather more evidence from the merging businesses and others to investigate potential issues with competition that could arise as a result of the merger.
Issues Statement published
The Issues Statement shows the focus of our Phase 2 investigation and sets out what are called theories of harm, which are the potential concerns that we are investigating.
At this point we invite anyone, including members of the public, to share their views with us.
Analysis of evidence
After publishing our Issues Statement, we continue gathering and reviewing evidence, and we often meet with the businesses proposing to merge and their representatives on site to learn more about their business. We then hold hearings with the main parties (and sometimes third parties) to ask them questions about the evidence that we have received and explore key issues.
If we think the merger could have a negative impact on competition, we also start thinking about potential solutions to those concerns (known as remedies).
Provisional findings
Once we have a good understanding of the business of the organisations proposing to merge, and a strong evidence base, we publish our provisional findings. This document outlines our provisional decision on the merger.
If we still have concerns, we will also send the merging businesses our thoughts on possible solutions, in a document referred to as a remedies notice.
Final report
This includes our final decision on the merger, including whether we believe it would harm competition for consumers or businesses in the UK.
If we find no competition concerns, the deal can go ahead as planned. If we do find competition concerns, we decide how these should be remedied. For example, this can include selling part of the business or prohibiting the merger altogether.
More detailed information on how the CMA runs merger investigations can be found in our Guidance on Mergers, CMA2.
A Phase 2 merger inquiry is an in-depth investigation into the impact of a merger on competition and its effect on businesses, consumers and the economy as a whole.
Every Phase 2 inquiry is run by an appointed inquiry group. This is an independent panel made up of 3 to 5 people with a range of business, finance, economic and legal experience. They provide independent advice on the inquiry and are responsible for making the final decision on the case.
For this investigation, the inquiry group includes:
Our administrative timetable sets out the key stages of the Microsoft / Activision merger inquiry over the 24-week timeframe for the investigation. This timetable can be extended by up to 8 weeks if there are special reasons. If there is an extension, we will publish the reasons why.
Our provisional findings
On 8 February we published our provisional findings. This document explains our provisional view of the impact of the merger, our provisional decision, and how we came to it.
Weve provisionally found that, if Microsoft buys Activision, this may be expected to result in what we call a substantial lessening of competition in console gaming and cloud gaming services.
These findings are provisional, which means they are not the final view of the CMA. Now that weve published them, Microsoft and Activision (the parties) and others can provide feedback on what weve set out before we make our final decision.
Cloud gaming
Cloud gaming is still developing and is what we call a dynamic market. This means its likely to continue evolving and lead to new and innovative products.
Weve provisionally found that, if Microsoft bought Activision, the future of the cloud gaming market could change.
Our provisional view is that Microsoft already holds a strong position in cloud gaming services that puts it at an advantage over rivals, including through its ownership of Xbox, the leading PC operating system (Windows), and a global cloud computing service infrastructure (Azure and Xbox Cloud Gaming).
We provisionally believe that buying Activision would reinforce this position.
This could reduce competition and harm gamers in the long run, with customers in the UK potentially facing higher prices, reduced range, lower quality, worse service, and/or reduced innovation in this important and rapidly developing market.
Console gaming
We are concerned that the merger could ultimately harm current and future gamers in the UK, whether they are Xbox users or PlayStation users.
We provisionally found that a small number of key games, including Call of Duty (CoD), play an important role in driving competition between consoles.
We have provisionally found that Xbox and PlayStation compete closely with each other at present and that access to the most important content, like CoD, is an important part of that competition. Reducing this competition between Microsoft and Sony could result in console gamers seeing higher prices, reduced range, lower quality, and worse service in gaming consoles over time.
Competition in the console and gaming market is good for gamers. PlayStation is a strong console provider, but that strength is part of what makes it necessary for Xbox to compete hard to attract users.
If the merger reduces this level of competition, then it could eventually lead to higher prices, reduced range, lower quality, worse service, and/or reduced innovation for console gamers, whether they currently play on Xbox or PlayStation.
What were investigating
The CMA will investigate whether the merger could significantly lessen competition in the supply of any products and services in the UK, and as a result lead to higher prices, less choice or worse quality for those products or services.
As explained in the Issues Statement, the CMA expects to look at:
The impact of the merger on other console gaming platforms
Well explore how the merger might negatively impact the availability of Activision content and games on other consoles. This will include