European Commission Approves Microsoft Acquisition of Activision Blizzard
hace 19 días
Less than a month after the deal was
blocked by the UK's Competition and Markets Authority
European Commission has cleared Microsoft's acquisition of Activision Blizzard
, finding that Microsoft "would have no incentive to refuse to distribute Activision’s games to Sony” and that “even if Microsoft did decide to withdraw Activision’s games from the PlayStation, this would not significantly harm competition in the consoles market.”
The European Commission has approved, under the EU Merger Regulation, the proposed acquisition of Activision Blizzard (‘Activision') by Microsoft. The approval is conditional on full compliance with the commitments offered by Microsoft. The commitments
the competition concerns identified by the Commission and
represent a significant improvement for cloud gaming as compared to the current situation
The Commission's in-depth market investigation indicated that Microsoft
would not be able to harm rival consoles and rival multi-game subscription services
. At the same time, it confirmed that
Microsoft could harm competition in the distribution of games via cloud game streaming services
its position in the market for PC operating systems would be strengthened
The Commission's glowing review of the deal still comes with reservations: requiring that Microsoft commit to licensing Activision Blizzard games to competing services, ensuring that gamers who have purchased or subscribed to access Activision games be able to stream those games on other devices and services than just Microsoft's own. This follows ten-year deals already proposed by Microsoft to bring Activision Blizzard games to Steam, Nintendo, and GeForce Now, which the Commission noted as well, stating that the acquisition of Activision Blizzard "no longer raised competition concerns and would ultimately unlock significant benefits for competition and consumers."
Dealing with the CMA
While the European Commission has approved, the UK Competition and Markets Authority remains standing in the way. Microsoft and Activision Blizzard are both prepared to fight the ruling, having engaged
Daniel Beard KC
, a highly regarded competition barrister who defeated the CMA in court last year and defended Apple and Intel in winning appeals against European regulators in 2019 and 2022, to lead their challenge in a Competition Appeal Tribunal hearing tomorrow, May 16th.
The CMA's ruling has been heavily criticised over the past few weeks, with even UK Prime Minister Rishi Sunak suggesting the regulator overstepped, though recent comments from the regulator continue to defend their initial decision.
Several legal and competition analysts have also criticized the CMA's ruling, with business lawyer Richard Hoeg calling it
completely faulty logic
, and FOSS Patent's Florian Mueller
anticipating a quick overturn
I see a very high probability of the CMA decision being quashed on irrationality grounds. It is an irrational decision not only in terms of that being the legal standard for the non-procedural parts of CMA appeals but even in a literal sense. Statistically, the CMA wins 67% of all merger appeals, which means that it does not win the other 33%. Neither is this the average case nor are average lawyers at work. Many merger decisions don't get appealed, or the appeals at least don't reach the decision stage. Regulatory resistance often results in parties changing plans. Here, however, both parties have made unequivocal statements and their actions (the lawyers they've hired) speak louder than words. If they have to extend the merger agreement, they will presumably do so.
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