The Mercury News Weekend

Microsoft, Activision address UK antitrust concerns

- By Katharine Gemmell and Leah Nylen Bloomberg

Microsoft and Activision Blizzard met with the UK's antitrust watchdog this week to hash out proposals over concerns their $69 billion deal would hamper competitio­n in the video game industry, according to people familiar with the discussion­s, as global regulators step up their scrutiny of the controvers­ial deal.

Lawyers for Microsoft attended a private hearing with the Competitio­n and Markets Authority in London on Monday to discuss the regulator's provisiona­l findings and assess the feasibilit­y of proposed remedies, said the people, who asked not to be named discussing a confidenti­al matter.

The CMA on Feb 8. took an initial view that the merger could result in higher prices, fewer choices and less innovation for UK gamers. It suggested a number of remedies, including the divestitur­e of the best-selling Call of Duty game or blocking the deal altogether. The agency did say it would consider other remedies that would safeguard rivals' access to the blockbuste­r shooter game.

The London meetings came after senior executives and lawyers from Microsoft and Activision gathered in Brussels last week for a closed-door meeting with European Union regulators to try and defend the deal. Microsoft president Brad Smith made it clear there that it wasn't “feasible or realistic” to do the deal unless it came with the blockbuste­r title Call of Duty.

Microsoft also said it's willing to pay a thirdparty monitor to oversee their compliance, the people said, a measure designed to relieve the CMA from having to devote resources to make sure the tech giant follows through on its promises. The UK watchdog in its provisiona­l assessment left the door open for behavioral remedies. The company has previously said it had a long record of keeping its promises to regulators.

Spokespeop­le at Microsoft and CMA declined to comment. Activision Blizzard separately met with the CMA on Wednesday on the proposals. A further hearing with Sony Corp., the main opponent to the deal, is scheduled for next week, the people said.

Microsoft announced last week that it struck deals with Nintendo Co. and Nvidia Corp. to share Call of Duty with their platforms, with 150 million more people getting access if the deal is approved.

Competitio­n authoritie­s in the US and UK have soured on so-called behavioral remedies in recent years. In a speech this week, CMA Chief Executive Officer Sarah Cardell said behavioral remedies are disfavored “particular­ly in a sector where technology or business models are changing quickly.”

The London meetings were led by the case's independen­t inquiry group, with support from the case team, said the people. The CMA will publish its final decision on the merger on April 26.

The companies plan to submit a revised proposals to EU authoritie­s this week following the closeddoor discussion­s, the people said. The commission extended the deal review deadline to April 25.

The U.S. Federal Trade Commission is locked in a lengthy legal process after suing to veto the transactio­n.

Newspapers in English

Newspapers from United States