The European Union (EU) has approved Microsoft’s $69 billion takeover bid for Activision Blizzard, despite previous opposition from the British competition regulator. However, the deal still faces challenges in the United States, where the Federal Trade Commission (FTC) has taken legal action to block it.
Microsoft’s bid for Activision Blizzard aims to create the world’s third-largest gaming company by revenue, following China’s Tencent and Japan’s Sony. The deal has raised concerns about antitrust issues.
In its approval, the European Commission stated that it was conditional on Microsoft’s full compliance with the commitments it offered. The commission believes that these commitments address the identified competition concerns and offer significant improvements for cloud gaming.
As part of the approval, Microsoft has been required to license popular Activision Blizzard games to competing cloud gaming services and make them available globally. This move aims to empower millions of consumers worldwide to play these games on various devices of their choice.
However, the deal’s fate in the UK remains uncertain. The Competition and Markets Authority (CMA) blocked the bid last month, citing concerns about competition in the fast-growing cloud gaming market and its potential impact on consumer choice.
If Microsoft fails to win its appeal against the CMA’s decision, the acquisition cannot proceed. Experts speculate that Microsoft may choose to leave the UK market, although such a move seems unlikely.
The clash between the EU and the UK regulators regarding this deal is notable, as it is the first major split decision since the UK’s exit from the EU in 2021. Millions of people in the UK use Microsoft products, making it a significant market for the company.
While Japan has already backed the takeover, Activision CEO Bobby Kotick welcomed the EU’s approval. He emphasized the company’s commitment to expand investment and workforce throughout the EU if the deal moves forward.
The rise of cloud gaming has attracted technology firms like Microsoft, who are eager to tap into this growing market. This shift entails a move away from physical consoles toward subscriptions and virtual access, allowing gamers to play on various devices.
The CMA highlighted that Microsoft already holds a significant share of the cloud gaming market, accounting for 60-70% of services. However, Microsoft has assured regulators that the merger will not harm competition, promising access to Activision’s games for an additional 150 million individuals.
Sony has expressed concerns about the deal, suggesting that it would grant Microsoft the power to restrict rivals’ access to the popular Call of Duty franchise. Yet, the EU decision states that Microsoft would have no incentive to withhold distribution of Activision’s games to Sony.
The commitments made by Microsoft to alleviate the EU’s concerns include providing a free license for European users to stream all current and future Activision Blizzard PC and console games via any cloud gaming service. These commitments aim to safeguard competition and innovation in the industry, according to the EU’s competition chief Margrethe Vestager.
The US FTC also filed a lawsuit against the acquisition, alleging that Microsoft had previously acquired smaller gaming companies to gain exclusive game rights.
In conclusion, the EU has approved Microsoft’s takeover bid for Activision Blizzard with certain conditions, while the bid’s fate in the UK and the US remains uncertain. This decision reflects the growing importance of cloud gaming and raises concerns about competition and consumer choice.
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Eugen Boglaru is an AI aficionado covering the fascinating and rapidly advancing field of Artificial Intelligence. From machine learning breakthroughs to ethical considerations, Eugen provides readers with a deep dive into the world of AI, demystifying complex concepts and exploring the transformative impact of intelligent technologies.
