Microsoft’s acquisition of Activision Blizzard for US$69 billion has been approved by the EU regulators. Just a few weeks ago, the British regulators blocked the takeover. The European Commission believes that the deal can go through because of Microsoft’s relevant commitments to cloud gaming.
The EU found that Microsoft had “no incentive to refuse to distribute Activision’s games to Sony” and that “even if Microsoft decided to withdraw Activision’s games from the PlayStation, this would not cause significant harm to competition in the console market.” But the EU Much like the U.K. regulator, the acquisition would indeed hurt competition in the distribution of PC and console games through cloud gaming services.
European Commission remedies:
Provides consumers in the European Economic Area with a free license to stream all current and future Activision Blizzard PC and console games for which they have a license, via any cloud game streaming service of their choice.
A corresponding free license is provided to cloud game streaming service providers, allowing eea-based gamers to stream any of Activision Blizzard's PC and console games.Taking into account market feedback, the Commission concluded that the proposed acquisition, as amended by commitment, would no longer raise competition concerns and would ultimately result in significant benefits to competition and consumers. The Commission’s decision is conditional on the full fulfillment of its commitments. Under the oversight of the committee, an independent trustee will monitor its implementation.
The EU’s decision to approve the mega-deal comes less than a month after British regulators blocked Microsoft’s plans, with Britain’s Competition and Markets Authority (CMA) blocking the deal over concerns about the cloud gaming market, saying The acquisition could lead to “less innovation and less choice for UK gamers in the coming years”. Microsoft is appealing the decision.
Microsoft has been grappling with regulators’ concerns about cloud gaming over the past few months, convincing EU regulators but not the UK. The software giant has signed cloud gaming deals with Boosteroid, Ubitus and Nvidia to allow Xbox PC games to run on those rival cloud gaming services, following a similar deal with Nintendo in December. All of these 10-year deals also include access to Call of Duty and other Activision Blizzard games, if the deal is approved by regulators.
The CMA is concerned that Microsoft’s control of Call of Duty, Overwatch and World of Warcraft will give it a big advantage over rivals in the cloud gaming market, which the regulator estimates Microsoft has about 60 percent of global cloud gaming services. % to 70% share.
Microsoft’s appeal in the UK could take months to complete. Today’s EU decision may help improve Microsoft’s chances of closing the mega-deal, but the company still faces challenges in the US and UK. Regulators in countries including Saudi Arabia, Brazil, Chile, Serbia, Japan and South Africa have also approved the deal, while China, South Korea, New Zealand and Australia are still reviewing the deal.
The European Union’s approval shows that Microsoft has cleared one of the three major regulatory hurdles facing the acquisition of Activision Blizzard. The U.S. Federal Trade Commission sued late last year to block the deal between Microsoft and Activision Blizzard. The case is still in the disclosure stage. The evidentiary hearing is now scheduled for August 2, so we are still months away from knowing the outcome of the case.
