Microsoft’s $69-billion Activision deal wins EU approval
Microsoft’s $69-billion takeover of Activision Blizzard won European Union approval, putting the bloc at odds with its U.K. and U.S. counterparts.
The European Commission said its own analysis showed the deal wouldn’t hurt competition after Microsoft vowed to let cloud rivals offer blockbuster titles such as “Call of Duty” on their own platforms for 10 years. The approval means the fate of the deal now hinges on the tech giant winning legal challenges in the U.S. and U.K. — probably an uphill task.
EU antitrust chief Margrethe Vestager on Monday described the deal as “pro-competitive” and said it would “kickstart” the cloud streaming market, which represents just 1% to 3% of the entire gaming market.
The EU’s blessing flies in the face of negative decisions by Britain’s Competition and Markets Authority, which last month showcased its post-Brexit emergence as a global watchdog, and the U.S. Federal Trade Commission, which sought to block the deal last year.
The EU’s Vestager said the difference in conclusions between EU and U.K. regulators centered on how quickly the cloud gaming market would develop in the future.
British regulators block Microsoft’s $69-billion deal to buy video game maker Activision Blizzard over worries that it would stifle competition.
“We agree that the cloud streaming market is a promising market. We may disagree about the speed at which it will develop,” Vestager said, adding that the EU sees a longer development period for cloud gaming than the U.K.
While the EU decision offers a glimmer of hope, “it probably doesn’t change much” for Microsoft’s chances of success in legal challenges involving the FTC and CMA, said Bloomberg Intelligence analyst Jennifer Rie.
The European Commission defended its findings, saying that the deal would enable millions of European consumers “to stream Activision’s games using any cloud gaming services” operating in the EU region.
The commission “conducted an extremely thorough, deliberate process to gain a comprehensive understanding of gaming,” said Bobby Kotick, Activision chief executive. “As a result, they approved our merger with Microsoft, although they required stringent remedies to ensure robust competition in our rapidly growing industry.”
Microsoft is headed for a battle with the Federal Trade Commission over whether the U.S. will block the its planned takeover of Activision Blizzard.
By contrast, the U.K. said that the deal would reinforce Microsoft’s advantage in the cloud gaming market by giving it control over a number of leading games including “Overwatch” and “World of Warcraft.” The U.K. watchdog found that Activision would be able to start providing games on cloud platforms in the future without the merger.
“Microsoft’s proposals, accepted by the commission today, would allow Microsoft to set the terms and conditions for this market for the next 10 years,” said Sarah Cardell, head of the British agency. “While we recognize and respect that the European Commission is entitled to take a different view, the CMA stands by its decision.”
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