Microsoft wins EU antitrust approval for Activision deal rejected by UK

BRUSSELS (Reuters) – Microsoft Corporation (MSFT.O) won European Union antitrust approval for its $69 billion acquisition of Activision (ATVI.O) on Monday, in a major push that could prompt Chinese and South Korean regulators to follow suit despite a veto. British on the bargain.

However, the US software giant still faces a battle to grab the world’s largest gaming industry acquisition. She has until May 24 to appeal the UK Competition and Markets Authority (CMA) ban. A final decision may take months.

The US Federal Trade Commission’s case against the deal is also pending at the agency, despite Japan’s approval of it in March.

The European Commission said the deal was pro-competitive because Microsoft agreed to license popular Activision games like “Call of Duty” to competing game streaming platforms, confirming a Reuters report in March.

EU antitrust chief Margrethe Vestager told reporters such licenses were “practical and effective”.

“In fact, they’ve improved the case for cloud game streaming significantly compared to the current situation, which is why we actually view them as pro-competitive,” she added, contrasting with the UK’s stance that the deal would beat competition in this market segment.

By rejecting the deal, the British watchdog was seen as flexing its power on the global regulatory stage since Brexit.

Microsoft has in recent months signed licensing agreements with Nvidia (NVDA.O), Nintendo (7974T), Ukrainian Boosteroid and Japan’s Ubitus to bring Activision games to their platforms if the deal goes through.

“Microsoft has been required by the European Commission to automatically license popular Activision Blizzard games to competing cloud gaming services. This will be implemented globally and will enable millions of consumers around the world to play these games on any device they choose,” said Microsoft President Brad Smith.

Shares of Activision were up 1.3% at 1650 GMT, while shares of Microsoft were little changed.

Cloud gaming market growth

Vestager said the commission has a different view than UK regulators of how the game broadcast market, which accounted for just 1% of the total market last year, will evolve.

“They see this market developing faster than we think,” she said. “There is some ambivalence here, because we believe that the remedies we have taken … will allow licensing to many, many cloud gaming markets.”

The UK’s Capital Markets Authority said streaming was the fastest growing segment of gaming, while consoles were a mature market. She said that Microsoft already accounts for 60-70% of global cloud gaming services and has other trump cards: Xbox, the leading computer operating system Windows and cloud provider Azure.

On Monday, the Capital Markets Authority said it was upholding its veto. Microsoft said it will appeal this decision to the Court of Appeal of Competition, and the ruling is expected to take months.

Alex Haffner, a partner at London law firm Flaggate, said the EU move would give critics of the CMA ammunition against the agency.

“Critics of the CMA’s position, of which there have been many, will inevitably seize today’s decision as vindicating the point that the UK regulatory regime is too rigid and stifles innovation,” he said.

“Attorneys for Microsoft and Activision will use the decision to provide greater weight to their appeal of the CMA’s decision.”

Fu Yun Che’s report

Our Standards: The Thomson Reuters Trust Principles.

#Microsoft #wins #antitrust #approval #Activision #deal #rejected

Leave a Comment

Your email address will not be published. Required fields are marked *

Scroll to Top