The European Commission has cleared Microsoft’s acquisition of Activision Blizzard

The European Commission has approved Microsoft’s proposed acquisition of Activision Blizzard.

The approval is conditional on Microsoft fully complying with several commitments related to the cloud gaming market.

The ruling arrives shortly after the UK’s competition regulator decided to prevent the $69 billion deal, which it claimed would stop the acquisition from happening globally, while US regulator the FTC is also suing to block the merger.

Microsoft will hope the European Commission’s decision will put pressure on other regulators to follow suit by clearing the deal subject to the Xbox maker agreeing to concessions.

The EU’s investigation into the deal indicated it would not harm rival consoles and rival multi-game subscription services, but that it could harm competition in the distribution of games via cloud game streaming services, and in the supply of PC operating systems.

To address the competition concerns identified by the Commission, Microsoft offered the following licensing commitments, with a 10-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.

Under supervision of the Commission, an independent trustee will be charged with monitoring the implementation of these remedies.

“These licenses will ensure that gamers that have purchased one or more Activision games on a PC or console store, or that have subscribed to a multi-game subscription service that includes Activision games, have the right to stream those games with any cloud game streaming service of their choice and play them on any device using any operating system,” the Commission said on Monday.

It added: “The commitments fully address the competition concerns identified by the Commission and represent a significant improvement for cloud gaming as compared to the current situation.”

Responding to today’s announcement, Microsoft president Brad Smith said: “The European Commission has required Microsoft to license popular Activision Blizzard games automatically to competing cloud gaming services. 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 said: “The EC conducted an extremely thorough, deliberate process to gain a comprehensive understanding of gaming. As a result, they approved our merger with Microsoft, although they required stringent remedies to ensure robust competition in our rapidly growing industry.”

He added: “We have deep roots in Europe. Our company was founded in France. ‘Candy Crush’ — one of our most successful franchises — was created in Sweden. And the senior leadership of our company comes from across the EU, including Austria, Germany, and Sweden. We intend to meaningfully expand our investment and workforce throughout the EU, and we’re excited for the benefits our transaction brings to players in Europe and around the world.

“The majority of the world’s gamers play on mobile phones. Europe has played a pivotal role in the development of gaming, especially mobile gaming, and we expect European game developers will continue to drive growth and innovation.

“Our talented teams in Sweden, Spain, Germany, Romania, Poland and many other European countries have the skills, ambition, and government support needed to compete effectively on a global scale. We expect these teams to grow and prosper given their governments’ firm but pragmatic approach to gaming.”

Last month, the UK’s Competition and Markets Authority (CMA) said it was preventing the deal due to concerns about its impact on the future of the cloud gaming market.

Further reading

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The acquisition was blocked last month but an appeal is planned

Responding to Monday’s EU decision, Sarah Cardell, CEO of the Competition and Markets Authority (CMA), suggested the EU Commission was wrong to approve the deal.

“The UK, US and European competition authorities are unanimous that this merger would harm competition in cloud gaming,” Cardell wrote. “The CMA concluded that cloud gaming needs to continue as a free, competitive market to drive innovation and choice in this rapidly evolving sector.

“Microsoft’s proposals, accepted by the European Commission today, would allow Microsoft to set the terms and conditions for this market for the next ten years. They would replace a free, open and competitive market with one subject to ongoing regulation of the games Microsoft sells, the platforms to which it sells them, and the conditions of sale.

“This is one of the reasons the CMA’s independent panel group rejected Microsoft’s proposals and prevented this deal. While we recognise and respect that the European Commission is entitled to take a different view, the CMA stands by its decision.”

Microsoft and Activision previously confirmed their intention to appeal the CMA’s ruling, which the former has called “bad for Britain” and the latter has labelled “irrational”.

The US Federal Trade Commission has also sued Microsoft in a bid to block the proposed acquisition over antitrust concerns.