Microsoft’s $69bn (£55bn) Acquisition of Activision Blizzard Approved by EU Despite UK’s Previous Veto
The European Commission (EC) has given the green light to Microsoft’s proposed purchase of Activision Blizzard, the publisher behind popular games like Call of Duty. The EU regulators stated that Microsoft has successfully addressed their concerns regarding potential competition issues.
This decision by the EU comes after the UK previously blocked the deal, citing concerns about potential negative impacts on competition within the growing cloud gaming industry. However, Microsoft’s efforts to address these concerns seem to have satisfied the European Commission.
The acquisition, if finalized, will mark the largest deal in the history of the gaming industry. However, the approval process remains divided among global regulators.
To proceed with the acquisition, Microsoft and Activision Blizzard still need approval from regulatory bodies in the UK, EU, and the US. In December, the US Federal Trade Commission filed a lawsuit seeking to block the deal, and a final decision by a judge is not expected before the end of this year.
European Commission Approves Acquisition as Microsoft’s 10-Year Free Licensing Deals Ensure Fair Competition
The European Commission (EC) has granted approval for the acquisition, citing Microsoft’s offer of 10-year free licensing deals as a key factor. These agreements, which guarantee European consumers and cloud game streaming services access to Activision’s PC and console games, are seen as promoting fair competition in the market.
In a statement, the EU competition watchdog stated that the commitments made by Microsoft effectively address the competition concerns raised during the investigation. They also acknowledged that these commitments represent a significant improvement for cloud gaming when compared to the current state of affairs.
Furthermore, the EC’s in-depth market investigation revealed that Microsoft’s actions would not pose a threat to rival consoles or multi-game subscription services. The commission also highlighted that various cloud game streaming service providers have expressed positive feedback and interest in obtaining licenses, with some already entering into agreements with Microsoft based on the proposed terms.
Major Challenges Cleared as EU Approves Microsoft’s Acquisition of Activision
Obstacles Ahead as UK’s Competition and Markets Authority (CMA) Vetoes Microsoft-Activision Deal
The UK’s Competition and Markets Authority (CMA) shocked experts last month when they vetoed the Microsoft-Activision deal, creating significant hurdles for its success. In response, Microsoft and Activision filed an appeal and enlisted the support of high-powered lawyers with experience representing British Royals to challenge the decision.
Adding to the challenges, on Thursday, the CMA imposed further restrictions, prohibiting Microsoft and Activision Blizzard from acquiring stakes in each other without “prior written consent.”
In light of the European Commission’s announcement, CMA’s chief executive, Sarah Cardell, reaffirmed their stance, standing by their decision. She stated, “Microsoft’s proposals, which have been accepted by the European Commission today, would grant Microsoft the power to dictate the terms and conditions of the market for the next decade.” She further expressed concerns that these proposals would replace a free, open, and competitive market with one subject to ongoing regulation of the games Microsoft sells, the platforms on which they are sold, and the conditions of sale. According to Cardell, this was one of the key reasons the CMA’s independent panel rejected Microsoft’s proposals and blocked the deal.