European Commission Approves Microsoft-Activision Takeover

The European Commission has approved Microsoft’s proposed $69 billion (£55bn) acquisition of game studio Activision Blizzard, maker of Call of Duty and other popular titles.

The move, which was widely expected, comes amidst opposition by the US Federal Trade Commission and the UK Competition and Markets Authority, both of which said the acquisition would harm competition.

But the Commission said Microsoft had offered concessions that allayed its concerns.

The EC’s decision adds to the complexities of the Activision deal, which include a legal complaint in California by gamers seeking an injunction to block the buy from going through.

Legal tangle

Microsoft is also appealing the CMA’s decision and awaits a judge’s ruling on the FTC’s lawsuit in the US.

“The saga is unlikely to come to an end anytime soon,” commented Gareth Mills, partner at law firm Charles Russell Speechlys.

He noted that while the Commission’s divergence from the CMA’s findings “may on the face of it seem surprising”.

“However, it is worth noting that the EU’s approval is based on Microsoft agreeing to enter into licensing deals with rivals and with other behavioural remedies for future conduct providing regulatory safeguards,” he said.

‘Fully addressed’

The picture is therefore more complex than a simple approval or rejection of the deal, he said.

“The commitments fully address the competition concerns identified by the Commission and represent a significant improvement for cloud gaming as compared to the current situation,” the European Commission said in a statement.

It said its investigation indicated Microsoft “would not be able to harm rival consoles and rival multi-game subscription services”.

It also noted that cloud game streaming services had given positive feedback, with some already entering into agreements with Microsoft.

CMA reacts

Nvidia’s GeForce Now, Ukraine’s Boosteroid and Japan’s Ubitus cloud game streaming platforms have all entered into 10-year agreements with Microsoft.

CMA chief executive Sarah Cardell said the agency stands by its decision.

“Microsoft’s proposals, accepted by the European Commission today, would allow Microsoft to set the terms and conditions for this market for the next 10 years,” she added.

“They would replace a free, open and competitive market with one subject to ongoing regulation of the games Microsoft sells, the platforms to which it sells them, and the conditions of sale.

“This is one of the reasons the CMA’s independent panel group rejected Microsoft’s proposals and prevented this deal.”