The EU has given Microsoft the go-ahead following the UK competition watchdog’s recent decision to block the deal from going through.
The European Commission has approved the acquisition of Activision Blizzard by Microsoft, it announced today (15 May).
Microsoft first said it planned to buy gaming giant Activision Blizzard in early 2022 as part of its plans to become the world’s third biggest video company by revenue after Tencent and Sony. At the time, the deal was slated to be worth $68.7bn.
However, the tech giant’s grand plan soon attracted scrutiny from multiple quarters. The EU launched a competition probe into the deal in November 2022, stating that it was concerned that the deal would reduce competition in the video game sector.
Prior to the EU’s plan to investigate the deal, the UK’s competition watchdog said its enquiry into the deal found that such a merger could “harm rivals” and “substantially lessen competition” in the gaming sector.
Last month, it blocked the deal from going through. The UK’s CMA was not the only regulator to voice concern about the proposed acquisition. The Federal Trade Commission in the US sued to block the deal from going through. It also cited competition concerns, just as the EU and the UK watchdog did.
The EU, however, said that it was satisfied for the deal to continue following its in-depth review. Its statement said that it had “based its decision on hard evidence, and on extensive information and feedback from competitors and customers, including from game developers and distributors as well as cloud game streaming platforms in the EU”.
The Commission said that its investigation concluded that Microsoft would not be able to harm rival consoles and rival multi-game subscription services if the deal went ahead.
It also confirmed that Microsoft could harm competition in the distribution of games via cloud game streaming services and that its position in the market for PC operating systems would be strengthened.
To address these competition concerns identified by the Commission, Microsoft committed to a series of comprehensive licensing commitments, with a 10-year duration.
These include a free license to consumers in the EEA that would allow them to stream, via any cloud game streaming services of their choice, all current and future Activision Blizzard PC and console games for which they have a license.
It also covers a corresponding free license to cloud game streaming service providers to allow EEA-based gamers to stream any of Activision Blizzard’s PC and console games.
“Video games attract billions of users all over the world. In such a fast-growing and dynamic industry, it is crucial to protect competition and innovation. Our decision represents an important step in this direction, by bringing Activision’s popular games to many more devices and consumers than before thanks to cloud game streaming,” said Margrethe Vestager, executive VP in charge of competition policy.
“The commitments offered by Microsoft will enable for the first time the streaming of such games in any cloud game streaming services, enhancing competition and opportunities for growth,” she added.
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