Microsoft Wins EU Antitrust Approval for USD69bn Acquisition of Blizzard

Microsoft [MSFT:US] has received antitrust approval from the European Commission for its proposed USD69bn acquisition of gaming giant Activision Blizzard [ATVI:US], as reported by CNBC on May 15. This approval comes despite the UK’s last month decision to block the deal. The European Commission acknowledged that Microsoft has resolved antitrust concerns by offering remedies in the emerging field of cloud gaming. These remedies focus on enabling users to stream Activision games they purchase on any cloud streaming platform, thereby alleviating concerns that Microsoft might make Activision’s games exclusive to its own cloud gaming service. Margrethe Vestager, European Union’s (EU) antitrust chief, considers Microsoft’s concession “practical and effective,” and she views the acquisition as pro-competitive.

The EU’s approval represents a significant victory for Microsoft, although the company still needs to convince its rivals, such as Sony [SONY:US], and other regulators, including the UK’s Competition and Markets Authority (CMA), that the Activision takeover will not harm competition in the console and cloud gaming market. While Microsoft has made similar concessions to the CMA, the regulator has insisted that the remedies are insufficient. The CMA is concerned that the deal could undermine competition in the emerging cloud gaming market, given that Microsoft already accounted for 60% to 70% of global cloud gaming services. Sarah Cardell, chief executive of the CMA, stated that the EU’s approval would allow Microsoft to dictate the terms and conditions for the nascent market for the next ten years. Cardell reiterated the CMA’s decision to block the deal. Microsoft plans to appeal this decision.

Sources:

https://www.cnbc.com/2023/05/15/microsoft-activision-deal-eu-approves-takeover-of-call-of-duty-maker.html

https://www.ft.com/content/5c5cc937-8209-4648-892a-ed74c37d4240

https://www.channelnewsasia.com/business/microsoft-wins-eu-antitrust-approval-activision-deal-vetoed-uk-3490081