Microsoft’s $68.7bn bid for Activision Blizzard has been approved by EU regulators today, just weeks after the UK’s competition agency blocked the deal.
The EU decided to approve the deal after remedies were put in place to address competition concerns, with the European Commission saying Microsoft offered 10-year free licensing deals to customers.
“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.
It said the commitments “fully address the competition concerns identified by the Commission and represent a significant improvement for cloud game streaming compared to the current situation.”
The news comes after the UK’s Competition and Markets Authority blocked the deal, sparking fury from the companies.
Microsoft responded saying it was a “bad day for Britain” and that the “English Channel has never seemed wider”, while Activision said “the UK is clearly closed for business”.
Both of the companies remain committed to the deal and are appealing the decision.
Activision Blizzard CEO Bobby Kotick struck a very different tone, however, as he welcomed the EU’s decision today.
“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,” Kotick said.
Microsoft’s 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.”
The CMA’s chief executive, Sarah Cardell, however, said today that the agency “stands by its decision.”
“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,” she said.
“While we recognise and respect that the European Commission is entitled to take a different view, the CMA stands by its decision,” she added.
The US Federal Trade Commission also moved to block the deal in December, which both companies are also challenging.
Alex Haffner, competition partner at law firm Fladgate, said the Commission’s decision “leaves clear blue water” between it and the CMA in their assessment of whether the competition concerns around the future of the cloud gaming market could properly be dealt with through the companies’ commitments.
“Whereas the commission felt these commitments, essentially a form of open licensing allowing gamers to stream Activision games on the platform/device of their choice, were “sufficiently comprehensive”, the CMA’s earlier decision described the same form of commitments as too static and unable to account for changes in the market over time,” Haffer said.
“Microsoft and Activision’s lawyers will also use the decision to provide greater ballast to their appeal of the CMA’s decision which is in the works,” he added.