EU approves Microsoft’s Activision Blizzard acquisition

European Commission clears the $69 billion deal, contradicting UK regulator

The European Commission has officially approved Microsoft’s $69 billion acquisition of Activision Blizzard after the company committed to certain remedies which “fully address the competition concerns identified by the Commission and represent a significant improvement for cloud gaming as compared to the current situation.”

The regulator concluded that “Microsoft would have no incentive to refuse to distribute Activision's games to Sony, which is the leading distributor of console games worldwide” 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.”

Microsoft has committed to the following steps to remedy the Commission’s concerns about potential harm to the competition in the cloud gaming segment:

• 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.

Both of these commitments run for a duration of ten years, just like the other deals Microsoft has already signed with Nintendo, Nvidia, Boosteroid, and other partners.

They “will empower millions of EEA consumers to stream Activision's games using any cloud gaming services operating in the EEA, provided they are purchased in an online store or included in an active multi-game subscription in the EEA. In addition, the availability of Activision's popular games for streaming via all cloud game streaming services will boost the development of this dynamic technology in the EEA. Ultimately, the commitments will unlock significant benefits for competition and consumers, by bringing Activision's games to new platforms, including smaller EU players, and to more devices than before,” the Commission said in its final statement.

The regulator will put an independent trustee in charge of supervising the implementation of these remedies. The EU expects full compliance with these measures from Microsoft, making approval to the deal conditional to that.

Microsoft president Brad Smith has already announced that the licenses for Activision Blizzard games would apply globally, not just in Europe.

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.

— Brad Smith (@BradSmi) May 15, 2023

Margrethe Vestager, who is in charge of the EU’s competition policy, said in a statement: “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. 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. 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.”

The United Kingdom’s Competition and Market Authority (CMA) has not approved the acquisition in its own investigation, saying the move would hamper competition in cloud gaming.

In reaction to the EU's decision, the CMA stated:

The UK, US and European competition authorities are unanimous that this merger would harm competition in cloud gaming. 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 10 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.