Washington, D.C. — In response to news that the UK Competition and Markets Authority will block Microsoft’s acquisition of Activision-Blizzard, a decision aligned with the US Federal Trade Commission’s suit last year, the American Economic Liberties Project released the following statement.   

“It’s a historic moment, as big tech got stopped today, and gamers and game developers won,” said Matt Stoller, Director of Research at the American Economic Liberties Project. “The UK Competition and Markets Authority blocked the largest big tech acquisition of the decade, Microsoft’s $69 billion acquisition of Activision. As determined by both the CMA in the UK and the Federal Trade Commission here, the software giant was trying to monopolize the fruits of science and art. We applaud the CMA for its decision, which is a resounding victory for gamers, developers, and innovators who depend on a level playing field to succeed. We encourage Microsoft to drop its pursuit of Activision and pursue free and fair competition.”

In December 2022, the Federal Trade Commission sued to block Microsoft’s $68.7 billion acquisition of Activision-Blizzard, a merger that would combine two of the largest game developers in the world. Activision — thanks to a merger with Blizzard in 2008 — publishes some of the world’s most popular AAA game titles. Already, Microsoft is the third largest game developer globally, already owns around 30 gaming studios, and owns the Xbox gaming platform.

With Xbox and Activision-Blizzard’s massive catalog of games, this merger would allow Microsoft to capture and dominate a large portion of the cloud gaming industry, consolidating it into a small group of firms who control walled gardens of content, data, and advertising. Microsoft could use this power to withhold the must-have games and products of Activision Blizzard from other consoles, restricting them to be exclusive to Microsoft’s cloud gaming platforms. The merger would likely raise prices down the line for gamers and give Microsoft crucial power over consumer data — knowing well that consumers’ alternatives are scarce and expensive.

Microsoft has argued that the merger is essential to its efforts to break into the mobile app gaming sector, where Apple and Google have ironclad control because of their chokehold on App Stores. As President Brad Smith wrote, acquiring “Activision Blizzard would enable Microsoft to compete against these companies.” Yet, while Microsoft’s claim that Apple and Google have monopoly control over the mobile ecosystem is reasonable, the appropriate response is not to grant Microsoft corresponding market power so it can cut special deals. Antitrust enforcers must instead break Google and Apple’s control over the mobile ecosystem, as Congress and a number of state legislators are currently considering.

Learn more about Economic Liberties here.

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The American Economic Liberties Project works to ensure America’s system of commerce is structured to advance, rather than undermine, economic liberty, fair commerce, and a secure, inclusive democracy. Economic Liberties believes true economic liberty means entrepreneurs and businesses large and small succeed on the merits of their ideas and hard work; commerce empowers consumers, workers, farmers, and engineers instead of subjecting them to discrimination and abuse from financiers and monopolists; foreign trade arrangements support domestic security and democracy; and wealth is broadly distributed to support equitable political power.