The European Commission has granted approval for Microsoft’s $75 billion acquisition of Activision Blizzard. The approval is contingent upon Microsoft’s full compliance with the commitments offered. According to the EU regulator, these commitments address the competition concerns and present a substantial improvement for cloud gaming compared to the current state.
EU’s officials took a different view of the cloud gaming market to their peers in the UK, where the Competition and Markets Authority blocked the same acquisition as they deem Microsoft’s concessions insufficient to address the competition concerns found.
The Commission’s preliminary investigation revealed that Microsoft’s acquisition could potentially harm competition in the distribution of console and PC video games, multi-game subscription services, cloud game streaming services, and the supply of PC operating systems. After a full investigation, the Commission determined that Microsoft would not be able to harm rival consoles or multi-game subscription services. But, it confirmed that Microsoft’s position in the cloud game streaming services market would strengthen, and competition in the distribution of games via cloud game streaming could be affected.
To address these concerns, Microsoft offered comprehensive licensing commitments with a duration of ten years. These commitments include providing consumers in the European Economic Area (EEA) with a free license to stream all current and future Activision Blizzard PC and console games via any cloud game streaming service of their choice. Similarly, cloud game streaming service providers based in the EEA will receive a corresponding free license to stream Activision Blizzard’s games. These licenses ensure that gamers who have purchased Activision games or subscribed to multi-game subscription services can stream the games on any device using any operating system with their preferred cloud game streaming service.
Video games attract billions of users all over the world. In such a fast-growing and dynamic industry, it is crucial to protect competition and innovation. Our decision represents an important step in this direction, by bringing Activision’s popular games to many more devices and consumers than before thanks to cloud game streaming. The commitments offered by Microsoft will enable for the first time the streaming of such games in any cloud game streaming services, enhancing competition and opportunities for growth. Margrethe Vestager, Executive Vice-President in charge of competition policy
To proceed with the deal, Microsoft and Activision Blizzard must now defeat US and UK regulators in court. In the UK, both companies are appealing the CMA’s decision and they will argue the case before the Competition Appeal Tribunal. In the US case, the FTC’s arguments remain focused on consoles, despite both the UK and now EU determining that the risk to Sony from the deal is limited given the PlayStation’s dominant market share.
