Microsoft has gained approval from the EU over its pending Activision Blizzard acquisition. The $68.7 billion deal has continued to be in the spotlight for the past few months, mainly as regulators raise questions on the potential implications of the purchase. Following reports of the EU possibly approving the Activision purchase, the European regulator's latest decision on the matter may put things in Microsoft's favor.
The Xbox maker has been aggressively pushing for regulatory approval over its Activision purchase with Microsoft signing exclusive deals with the likes of Nvidia, Ubitus, Nintendo, Boosteroid, and European cloud gaming service Nware. Microsoft even ran full-page newspaper ads about the Activision acquisition. While the company got the green light from several countries around the world, it faced notable opposition from key market regulators such as the US and Europe. Fortunately for Microsoft, the EU's latest verdict on the acquisition might paint an optimistic picture for the tech giant.
In a press release, the EU has announced Microsoft's pending acquisition of Activision Blizzard is approved following an in-depth investigation. According to the EU, the approval was granted following a commitment made by Microsoft to the regulator's concerns. The regulator has determined that should the deal goes through, Microsoft wouldn't be able to harm rival consoles or rival multi-game services. However, the EU did acknowledge that Microsoft could harm competition when it comes to distribution via cloud game streaming services and that "its position in the market for PC operating systems would be strengthened."
Nevertheless, as per the commitments made to the EU, Microsoft would be required to offer a free license to consumers in the European Economic Area (EEA) which would enable gamers to stream any Activision Blizzard title through any cloud game streaming service. This extends to the cloud game streaming service providers themselves, with the operators given a license to allow EEA players to stream any Activision Blizzard PC and console title. Microsoft President Brad Smith confirmed that the company will implement this globally which would mean any gamer would potentially be able to stream any Activision title via any game streaming service. The commitments will be applicable over a 10-year period, similar to the other recent deals made by Microsoft.
Interestingly, the EU states that it doesn't believe Microsoft would have any incentive to refuse Sony access to any of Activision's titles, echoing similar sentiments from the CMA's provisional findings on the Activision deal. It mentions that even if Microsoft removes Activision games from PlayStation, it wouldn't significantly harm competition in the console market. Further, the EU points out that Activision wouldn't have likely expanded its titles on multi-game subscription services without the deal going through as it would have cannibalized individual sales.
It's worth noting that the EU's decision comes less than a month after the CMA blocked the Activision Blizzard acquisition. The CMA followed this up by stating that Activision Blizzard will be restricted from acquiring any kind of stake in Microsoft without the approval of the regulator. While Microsoft is already looking to appeal the UK regulator's decision, the process will likely take months and the EU's latest decision may now help the tech giant build a stronger case. Additionally, it will be interesting to see how all of this plays out in the US with the FTC looking to push back on the deal as well.
Source: European Commission