After initially blocking the deal, the Competition and Markets Authority in the United Kingdom has approved Microsoft’s $68.7 billion acquisition of Activision Blizzard. Following provisional approval last month, the authority has given the green light after the company announced the selling of cloud streaming rights for Activision Blizzard’s titles to Ubisoft.
“In its original investigation, the CMA found Microsoft already held a strong position in relation to cloud gaming and blocked the deal. The sale of Activision’s cloud streaming rights to Ubisoft will prevent the distribution of important, popular content – including games such as Call of Duty, Overwatch, and World of Warcraft – from coming under the control of Microsoft in relation to cloud gaming. The restructured deal substantially addressed the concerns that the CMA had following its original investigation, which concluded earlier this year.”
While some “limited residual concerns” were identified, the CMA said that Microsoft provided “undertakings that will ensure that the terms of the sale of Activision’s rights to Ubisoft are enforceable by the CMA. The CMA consulted on these undertakings and is satisfied that this will provide the safety net needed to ensure this deal is properly implemented.”
The CMA’s chief executive, Sarah Cardell, said the authority is “resolute in its determination to prevent mergers that harm competition and deliver bad outcomes for consumers and businesses. We take our decisions free from political influence, and we won’t be swayed by corporate lobbying. We delivered a clear message to Microsoft that the deal would be blocked unless they comprehensively addressed our concerns and stuck to our guns on that.
“With the sale of Activision’s cloud streaming rights to Ubisoft, we’ve made sure Microsoft can’t have a stranglehold over this important and rapidly developing market. As cloud gaming grows, this intervention will ensure people get more competitive prices, better services and more choice. We are the only competition agency globally to have delivered this outcome. ”
Cardell also warned “businesses and advisors” about using the same tactics as Microsoft. “Businesses and their advisors should be in no doubt that the tactics employed by Microsoft are no way to engage with the CMA. Microsoft had the chance to restructure during our initial investigation but instead continued to insist on a package of measures that we told them simply wouldn’t work. Dragging out proceedings in this way only wastes time and money.”
Microsoft is aiming to close the acquisition of Activision Blizzard by October 18th. While it has an in-house trial with the US Federal Trade Commission – which was denied an injunction to block the deal and an appeal for the same – it’s still confident of hitting the deadline. Reports indicated that second round of approvals from the European Commission wouldn’t be necessary, so there are seemingly no hurdles remaining. Stay tuned for more updates in the meantime.