The European Union has officially approved Microsoft’s acquisition of Activision Blizzard worth $68.7 billion, despite the UK regulators recently blocking the deal. The EU regulators found that the acquisition would not harm competition in the console market, but they did have concerns about competition in the cloud gaming services for PC and console games.
To address these concerns, Microsoft offered remedies in the form of 10-year licensing deals. Consumers in EU countries will have the right to stream Activision Blizzard games they have purchased on any cloud gaming service of their choice, using any device and operating system. Cloud providers will also be granted licenses to stream these games in European markets.
The European Commission’s decision to approve the deal comes after the UK’s Competition and Markets Authority (CMA) blocked it, citing concerns about reduced innovation and choice for UK gamers. Microsoft then appealed the decision.
While the EU approval may bolster Microsoft’s chances, the company still faces regulatory hurdles in the United States and United Kingdom. The Federal Trade Commission in the US has sued to block the deal, and the case is ongoing. Other countries, including Saudi Arabia, Brazil, and Japan, have approved the deal, while China, South Korea, New Zealand, and Australia are still reviewing it.
Microsoft’s next major challenge will be the regulatory scrutiny in its home country. The company is scheduled for an evidentiary hearing in August as the case progresses with the Federal Trade Commission.
Activision Blizzard CEO Bobby Kotick welcomed the EU’s approval, expressing the company’s intention to expand investments and workforce in the EU. However, the CMA defended its decision, stating that the merger would harm competition in cloud gaming and criticizing Microsoft’s proposals, which would allow the company to set terms and conditions in the market for the next ten years.
Microsoft’s appeal process with the CMA is expected to be challenging, even with the concessions made for the EU approval.