EU regulators approve Microsoft’s Activision-Blizzard Acquisition

Microsoft has received approval from the EU for its $68.7bn Activision-Blizzard acquisition. Despite objections from Microsoft's rivals, the EU dismissed any issues with the acquisition. This could be a significant boost for Microsoft to proceed with the acquisition and strengthen its position in the gaming industry.

The decision comes after the CMA had already blocked the deal in the UK over cloud gaming concerns. Reacting to this announcement, the CMA also released a statement.

The EU dismissed Sony's concerns about gatekeeping and exclusivity, stating, "Microsoft would have no incentive to refuse to distribute Activision's games to Sony, which is the leading distributor of console games worldwide". They shared the investigation results in a press release, adding that even if Microsoft were to restrict Activision-Blizzard titles on Sony's consoles, it wouldn't greatly affect competition in the console gaming market. EU regulators noted that Call of Duty is less popular in the EEA than in other markets.

Just like with the CMA's investigation, the EU isn't completely done investigating the acquisition deal. The regulators are still investigating the deal's impact on the Cloud Gaming market. They acknowledged that the deal would harm competition in the Cloud Gaming market. The UK regulators blocked the deal citing the same concerns and this could spell trouble for Microsoft with the EU's approval as well. Immediately after the CMA's announcement, Microsoft signed a deal with the European cloud gaming platform NWave. This move is without a doubt, an attempt to appease EU regulators.

Microsoft President Brad Smith Tweeted that the European Commission requires Microsoft to license popular Activision-Blizzard games to competing cloud services. It appears the EU is serious about addressing concerns around competition within the Cloud Gaming market. This is indicative of the EU's approval hinging on Microsoft respecting the spirit of healthy competition within the cloud gaming space.

The UK's CMA which blocked the deal a few weeks ago released a statement in response to the EU's investigation. According to them, "The UK, US and European competition authorities are unanimous that this merger would harm competition in cloud gaming". The CMA also claims that Microsoft's proposals, which were accepted by the European Commission would give Microsoft free reign to set the terms in the Cloud Gaming market. The UK regulator concluded its statement by stating it stands by its decision to block the deal.

It appears that Microsoft still has work to do to convince regulators of the deal's legitimacy. While the EU's statement does provide a much-needed boost after the announcement, all regulators have expressed concerns about its impact on the cloud gaming market. The European Commission has acknowledged these concerns and is enforcing some limitations on the scope of the deal. Microsoft plans to appeal the CMA's decision to block the deal in the UK. Ultimately, the EU's announcement has provided a fresh lease of life into the acquisition.

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