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UK competition regulator finds Microsoft-Activision deal ‘could lead to competition concerns’

The United Kingdom’s antitrust regulator is concerned that Microsoft’s blockbuster purchase of Activision Blizzard could create a monopoly in the nascent cloud gaming space. The Competition and Markets Authority (CMA), which began investigating the deal back in July, says that it’s not yet reassured by the promises Microsoft has made to get the deal done. It feels that, once Activision is a part of Microsoft, the Xbox maker could use its “control over popular games like Call of Duty and World of Warcraft” to “harm rivals” by boxing them out of access to popular titles. Microsoft has already publicly committed not to hoard exclusives, (and said that Actiblizz’s library isn’t all that anyway) but sweet words haven’t appeased the officials.

In a statement, it said that it was giving Microsoft and Activision five days to submit proposals that would address its concerns. If those did not pass muster, however, then the office will open a lengthy “Phase 2” investigation involving an independent panel to scrutinize the deal in greater depth. That will likely delay any completion of the deal, which would then only be rubber-stamped if regulators were convinced that the deal would not cause a “substantial lessening of competition.” It’s likely that, whatever happens, Microsoft will need to commit to not using its growing clout to hurt other companies in the space by depriving them of key franchises.

Microsoft’s gaming chief Phil Spencer has already responded to the announcement, affirming the previous pledge not to pull Call of Duty from PlayStation, for instance. Spencer pointed to the cross-platform appeal of Minecraft, a title Microsoft purchased in 2014, as evidence of the company’s good faith. Activision CEO Bobby Kotick published an open letter to employees, saying that the company will “fully cooperate” with regulators, which are taking “appropriate” steps to ensure that there are no risks to competition.

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Tech News

Peloton Tread+ owners urged by US regulator to stop using it

The COVID-19 pandemic has forced many people to spend most of their time indoors for more than a year now. That has, in turn, given birth to new products and services designed to be used inside the house, from new entertainment options to fitness equipment. Peloton has been riding the wave of that renewed interest in indoor exercise equipment but its latest connected treadmill, the Tread+, has been written off from the US CPSC’s book for dozens of accidents, including one child’s death last month.

It probably shocked the fitness world how the $4,295 device, not including the subscription fee, caused the death of a child but that was just the tip of the iceberg. A report in February revealed that a three-year-old child was found trapped underneath the Peloton Tread+ sustained significant brain injury but was expected to fully recover, at least according to the company. All in all, however, the US Consumer Product Safety Commission says it is aware of 39 incidents, including that death.

The CPSC wants the Tread+ to be recalled but, unsurprisingly, Peloton is trying to fight it off. Over the weekend, the recalls agency published a warning to inform owners of the treadmill about the safety hazards of the device. It is urging them to stop using the Tread+ if there are small children or pets at home. It also warns about the possibility of some smaller objects getting sucked beneath the Tread+ which could cause injury to users themselves.

Peloton unsurprisingly blasted what it called a unilateral press release and decried how it was inaccurate and misleading. In a nutshell, the company says that the Tread+ can pose a hazard just like any other motorized exercise equipment if you don’t follow instructions and warnings. Those, according to the company, already tell owners not to let children, pets, or objects near the machine.

Peloton last year recalled first-gen Bike pedals after reports of users sustaining injuries after the pedals’ clips broke during use. Given how much the Tread+ costs, however, the fallout from its recall could mean huge losses for the company, which is why it is reportedly fighting hard against such a recall despite injuries and even death.

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