February 29, 2024

European Union Approves Microsoft’s $69B Activision Blizzard Acquisition

FTC

Microsoft‘s proposed $69 billion acquisition of Activision Blizzard faced a setback from UK regulators in April. However, the European Union’s European Commission has given its approval, albeit with certain conditions.

The deal is contingent on commitments made by Microsoft, including granting European consumers who purchased an Activision Blizzard title a free licence to stream games on platforms of their choice. Additionally, cloud game streaming service providers will receive a corresponding free licence to enable EEA-based gamers to stream Activision Blizzard’s PC and console games.

The European Commission’s decision was based on several factors. It stated that Microsoft would have no reason to withhold distributing Activision’s games to Sony, as Sony dominates the console games market globally, including the European Economic Area (EEA). Even if Microsoft were to withdraw Activision’s games from the PlayStation, it would not significantly impact competition in the console market.

Moreover, Call of Duty, although popular worldwide, is comparatively less popular in the EEA. The Commission concluded that Sony could rely on its market position, extensive game catalogue, and size to defend its competitive standing.

The acquisition has received approvals from various countries, including Saudi Arabia, Brazil, Serbia, Chile, Japan, South Africa, and Ukraine. However, the United States (Federal Trade Commission, or FTC) and the UK (Competition & Markets Authority, or CMA) remain exceptions in granting their blessings.

The CMA’s ruling has been deemed an exception, while the EC decision has been considered the guiding principle. The CMA Chair, Marcus Bokkerink, and CEO, Sarah Cardell, will testify before the UK Parliament’s Business and Trade Committee, where they are likely to face questions about the acquisition decision. Microsoft is appealing the CMA’s decision before the Competition Appeal Tribunal (CATribunal), with a summary of the appeals from Microsoft and Activision Blizzard expected soon.