EU approves Microsoft’s Activision deal, UK vetoed.

Microsoft Wins EU Antitrust Approval for $69 Billion Activision Acquisition

Microsoft Corp has won EU antitrust approval for its $69 billion acquisition of Activision, in a significant boost that could prompt Chinese and South Korean regulators to follow suit despite a British veto of the deal. The European Commission said the transaction was pro-competitive due to Microsoft’s agreement to license popular Activision games such as “Call of Duty” to rival game streaming platforms. Such licenses are “practical and effective”, European Union antitrust chief Margrethe Vestager told reporters.

The Battle Continues

The U.S. software giant still faces a battle to clinch the world’s biggest gaming industry takeover, however. It has until May 24 to appeal a decision by Britain’s Competition & Markets Authority (CMA) to block it. A final decision may take months. The U.S. Federal Trade Commission’s case against the deal is also pending at the agency, though Japan approved it in March.

Cloud Gaming Market Growth

Vestager said the Commission had a different view from UK regulators of how the game streaming market, which accounted for just 1% of the total market last year, would develop. “They see this market developing faster than we would think,” she said. “There is a bit of a paradox here, because we think that the remedies that we have taken … will allow for licensing to many, many more in the cloud gaming markets.”

CMA Critics

The EU move will give CMA critics ammunition against the agency, said Alex Haffner, a partner at London law firm Fladgate. “Critics of the CMA’s stance, of which there have been many, will inevitably seize on today’s decision as proving the point made that the UK’s regulatory regime is too rigid and stifles innovation,” he said. “Microsoft and Activision’s lawyers will also use the decision to provide greater ballast to their appeal of the CMA’s decision.”

• Microsoft has until May 24 to appeal a decision by Britain’s Competition & Markets Authority (CMA) to block the acquisition of Activision.
• The U.S. Federal Trade Commission’s case against the deal is also pending at the agency, though Japan approved it in March.
• The European Commission said the transaction was pro-competitive due to Microsoft’s agreement to license popular Activision games such as “Call of Duty” to rival game streaming platforms.
• The EU move will give CMA critics ammunition against the agency, said Alex Haffner, a partner at London law firm Fladgate.

Microsoft President Brad Smith said: “The European Commission has required Microsoft to license popular Activision Blizzard games automatically to competing cloud gaming services. This will apply globally and will empower millions of consumers worldwide to play these games on any device they choose.”

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