EU approves Microsoft-Activation deal despite UK decision to block acquisition

EU regulators have approved Microsoft’s $75 billion acquisition of Activision Blizzard, breaking with the UK and US, the gaming industry’s biggest ever deal.

EU competition chief Margrethe Vestager said on Monday that Microsoft has made a series of concessions to ease their concerns, including allowing all European consumers to stream it on all cloud game streaming providers for 10 years. or allowing the purchase of future Activision games.

Brussels officials took a different view on the cloud gaming market to their peers in the UK, where the Competition and Markets Authority deemed Microsoft’s concessions insufficient to allay fears that the deal would consolidate its dominance of the nascent industry.

“Even if Microsoft decides to withdraw Activision’s games from PlayStation, this will not significantly harm competition in the console market,” the EU said in a statement.

Vestager said she was comfortable reaching a different conclusion to the US Federal Trade Commission and the CMA, which has argued that Microsoft can make Activision’s games exclusive to its cloud gaming service.

“I think it’s really important that we own this decision,” Vestager said. “We think it’s a good solution and we think it’s competitive.”

The European Union’s decision to approve the transaction has removed a significant hurdle for Microsoft and Activision, which have said they remain committed to a transaction that would make the company the third-largest company by revenue behind China’s Tencent and Japan’s Sony. Will make a big gaming company.

However, it is unclear how the companies will be able to overcome objections from UK and US regulators.

In the UK, Microsoft and Activision are appealing the CMA’s decision, but can only do so on procedural grounds. UK regulators have called for significant measures, such as forced sales. Duty franchise, a move the companies believed would make the deal impractical.

‘All options are on the table,’ said a person with direct knowledge of Microsoft’s thinking.

Microsoft President Brad Smith said: “The European Commission requires Microsoft to automatically license popular Activision Blizzard games to competing cloud gaming services. This will apply globally and allow millions of consumers around the world to access these games. Will empower them to play on any device they choose.

“The EC conducted an extremely thorough, deliberate process to gain a comprehensive understanding of gaming,” said Bobby Kotick, chief executive of Activision Blizzard.

After criticizing the CMA’s decision and suggesting that the UK was “apparently closed for business”, Kotick said: “We want to meaningfully expand our investment and workforce across the EU. . . we expect We are confident that these teams will thrive and prosper given their governments’ firm yet pragmatic approach to gaming.

The EU’s decision comes despite protests from other groups, mainly Japan’s Sony, which accused Microsoft of misleading regulators by giving access to its promises. Duty for other platforms. The EU agreed with UK officials that Sony’s dominance of PlayStation in the console market outweighed any competition concerns from the deal.

Microsoft already has licensing deals with cloud game platforms including Nvidia’s GeForce Now and has committed to granting similar rights to any future company that launches a rival service over the next decade.

None of the games made by Activision Blizzard are available on the cloud platform, so the European Commission hopes the proposal will spur competition in what one official has called a “very limited” but part of a “growing” and “innovative” market.

The move comes as tough scrutiny of Big Tech deals by antitrust authorities around the world. “Regulators want to send a signal that the tech party is over,” said a regulator in reference to the UK blocking the deal earlier.

Vestager said the main focus of its investigation was the deal’s impact on cloud gaming, after dismissing concerns about potential damage to the console market. The European Union determined that it would be too damaging for Activision’s profits for Microsoft Duty than the PlayStation console, which outsells the Xbox four to one in the European market.

An EU official suggested that the CMA has “exaggerated” Microsoft’s share of the cloud game streaming market, suggesting that Microsoft’s share in the 60 to 70 percent estimate stated by the UK regulator in its final decision may be higher. The Game Pass subscription service includes many customers who do not actually use the cloud gaming features of the product.

“For us, it’s not a separate market, it’s a segment of the overall (video game) market,” the official said.

To go ahead with the deal, Microsoft and Activision Blizzard must now defeat US and UK regulators in the courts. In the UK, both companies have hired top barristers to argue their case at the Competition Appeal Tribunal, which will determine whether the CMA’s decision was valid by analyzing the agency’s decision-making processes.

In the US case, despite both the UK and now the EU, the FTC’s arguments focused on the console, determining that the risk to Sony from the deal was limited given PlayStation’s dominant market share.