Microsoft’s proposed acquisition of Activision Blizzard has been approved by the European Commission, subject to behavioural remedies regarding the cloud market. The news comes after the UK’s Competition and Markets Authority (CMA) moved to block the deal last month, with the FTC also suing to prevent the deal.
The EU regulator’s investigation found that the proposed merger would “not be able to harm rival consoles and rival multi-game subscription services”. The commission found that should the deal go ahead, Microsoft wouldn’t benefit from halting distribution of games like Call of Duty on PlayStation.
However, the regulator did conclude that the deal could negatively impact the cloud gaming business, as well as strengthen Microsoft’s position in the PC operating systems market. To counter this concern, Microsoft have offered the following licensing commitments, with a ten year duration:
- A free license to consumers in the EEA that would allow them to stream, via any cloud game streaming services of their choice, all current and future Activision Blizzard PC and console games for which they have a license.
- A corresponding free license to cloud game streaming service providers to allow EEA-based gamers to stream any Activision Blizzard’s PC and console games.
In addition, the regulator will supervise an independent trustee who will be trusted with monitoring the implementation of these commitments.
“These commitments fully address the competition concerns identified by the Commission and represent a significant improvement for cloud game streaming compared to the current situation.” A press release from the European Commission read.
“They will empower millions of EEA consumers to stream Activision’s games using any cloud gaming services operating in the EEA, provided they are purchased in an online store or included in an active multi-game subscription in the EEA.” The commission continued.
“In addition, the availability of Activision’s popular games for streaming via all cloud game streaming services will boost the development of this dynamic technology in the EEA.”
Microsoft vice chair and president Brad Smith responded to the outcome, stating that the commitments offered to the EU will apply worldwide. “The European Commission has required Microsoft to license popular Activision Blizzard games automatically to competing cloud gaming services.” Smith said. “This will apply globally and will empower millions of consumers worldwide to play these games on any device they choose.”
Activision Blizzard CEO Bobby Kotick also commented on the EU’s approval, describing it as a “important milestone”, while also stating that there is still more regulatory work to be done.
“Today, we achieved an important milestone: the European Commission (EC), one of the world’s most thorough and respected regulators, approved our merger with Microsoft.” Kotick said in a statement. “This decision underscores the benefits our transaction provides to players and to competition.”
“Careful regulators in numerous other countries have already approved the merger.” Kotick added. “By joining them today, the EC has once again demonstrated their rigorous, fair and sensible approach with the creation of appropriate regulatory guardrails that ensure competition in important growth industries.
“Microsoft has agreed to conditions as part of the EC’s approval, including licenses for legitimate cloud gaming providers to stream Activision Blizzard games and enforcement mechanisms to ensure these regulatory commitments are upheld.”
Kotick continued: “This important step provides a proper roadmap for regulators around the world to consider when determining how best to encourage and promote competition in the gaming industry.
“There is still work to be accomplished before our merger can be finalized but it is encouraging that regulators like the European Commission understand and appreciate the considerable growth opportunities provided by our industry.”
Last month, the UK’s Competition and Markets Authority announced that it would be preventing the deal due to concerns surrounding the cloud gaming market.
[…] The most notable opposition came from the FTC (USA), European Commission and the CMA (UK), with the latter deciding to approve the deal earlier today. After initially deciding to block the merger, the UK regulator chose to approve the deal after Microsoft agreed to sell the cloud gaming rights for all Activision Blizzard titles to Ubisoft. Microsoft have also agreed various long-term deals to bring Activision Blizzard titles to other cloud gaming services, a move which gained approval from the European Commission. […]