EU approves Microsoft's acquisition of Activision Blizzard, sees no harm to cloud gaming market
Microsoft can breath a sigh of relief for a while as the European Commission has finally cleared its $68.7 billion acquisition of Activision Blizzard. The regulator found remedies offered by Microsoft in the cloud gaming area compelling enough.
The European Commission issued its final ruling on the proposed merger between Microsoft and Activision Blizzard on May 15.
Following an in-depth investigation, the regulator found that:
- Microsoft would have no incentive to stop distributing Activision games on PlayStation;
- Withdrawing Activision titles from Sony’s platform wouldn’t significantly affect competition in the console market (Call of Duty is “less popular in the EEA than in other regions of the world”);
- The merger wouldn’t harm third-party providers of game subscription services because Activision would have never made its products available on such services, as this would “canabilize sales of individual games”;
- The acquisition could harm competition in the cloud gaming market, but Microsoft’s agreements with its rivals and the popularity of Activision games could promote its growth;
- Microsoft would strengthen its dominant position in the market for PC operating systems only if it decided to hinder the quality of Activision titles on non-Windows PCs.
The decisive argument in favor of the deal were 10-year licensing deals that Microsoft made with its rivals such as GeForce Now, Nintendo, Boosteroid, and Ubitus. Under these agreements, users will be able to play all current and future Activision Blizzard games using any cloud gaming service of their choice.
These commitments, according to the regulator, “fully address the competition concerns identified by the Commission and represent a significant improvement for cloud gaming as compared to the current situation.”
This also made the European Commission believe that the $68.7 billion deal will no longer raise antitrust concerns and instead unlock significant benefits for competition and customers.
“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,” Margrethe Vestager European Commission’s executive VP in charge on competition policy, said in a statement. “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.”
The European Commission’s ruling comes weeks after the UK’s Competition and Markets Authority (CMA) blocked Microsoft’s acquisition of Activision Blizzard due to its potential threat to the cloud gaming market.
Clearing the deal in the EU is a positive sign for Microsoft, but the company is still facing an antitrust lawsuit in the US filed by the Federal Trade Commission. An evidentiary hearing is scheduled for August 2.
