Microsoft's $69bn Activision Blizzard deal gets approval from EU

Company has offered 10-year free licensing deals to consumers

The European Commission said that Microsoft offered remedies in the nascent area of cloud gaming that staved off antitrust concerns. Reuters

EU competition regulators have cleared Microsoft’s $69 billion acquisition of Activision Blizzard, as remedies offered by the US company resolved their concerns.

The EU's approval is a huge win for Microsoft as it attempts the biggest takeover in gaming history — three weeks after British regulators blocked the deal — and with US authorities still trying to stop it.

Microsoft's remedies centred on 10-year free licensing deals allowing users to stream Activision games they purchase on any cloud streaming platform, the European Commission said.

“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,” the EU competition watchdog said.

In cloud gaming, players stream games on mobile phones and hand-held devices they already own.

The takeover would give Microsoft control of hugely popular titles including Call of Duty, World of Warcraft and Candy Crush.

The all-cash deal, first announced more than a year ago, has been scrutinised by regulators amid fears that it would give Microsoft and its Xbox console control of Activision’s hit games.

“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,” said EU competition commissioner Margrethe Vestager.

“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.

Microsoft Brad Smith said the deal 'will empower millions of consumers worldwide to play these games on any device they choose'. AP

“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.”

In the agreement, Microsoft promises to allow gamers to stream Activision's titles on any cloud gaming streaming services operating in Europe.

“The European Commission has required Microsoft to license popular Activision Blizzard games automatically to competing cloud gaming services,” Microsoft vice chairman Brad Smith said.

“This will apply globally and will empower millions of consumers worldwide to play these games on any device they choose.”

Fierce opposition to the deal was partly driven by rival Sony, which makes the PlayStation gaming system.

Microsoft sought to counter the resistance by striking a deal to licence Activision titles.

With the EU that has worked, but not for regulators in the UK.

In April, the UK's Competition and Markets Authority watchdog blocked the takeover saying it would harm competition in cloud gaming.

It added that Microsoft's commitment to offer access to Activision's multibillion-dollar Call of Duty games to leading cloud-gaming platforms would not remedy its concerns.

On Monday, CMA chief executive Sarah Cardell said authorities in the UK “stand by” the decision to block the deal because promises from Microsoft were not enough.

“Microsoft's proposals, accepted by the European Commission today, would allow Microsoft to set the terms and conditions for this market for the next 10 years,” she said.

“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.”

If a regulator in one country does not approve a takeover, the merged company will not be able to operate in that market.

While Britain is a smaller market compared with the EU and the US, millions use Microsoft products.

The US Federal Trade Commission has also launched legal action to block the deal.

Updated: May 15, 2023, 10:38 PM