With the United States’ FTC having failed to make a strong enough case to block Microsoft’s proposed $69 billion acquisition of Activision Blizzard, the United Kingdom’s Competition and Markets Authority (CMA) remains among the last major stumbling blocks that the deal needs to clear, and all parties involved have now taken another significant step towards resolution.
The CMA and Microsoft entered into negotiations regarding a restructured deal in July, and following Microsoft’s newest submission, the regulatory body has revealed in a statement that it has “provisionally concluded” that the remedies put forward by Microsoft address many of the issues the regulator had with the deal in its original form.
In particular, the CMA says Microsoft’s decision to sell cloud streaming rights for Activision Blizzard content to Ubisoft is a major deciding factor.
“The sale of Activision’s cloud streaming rights to Ubisoft will prevent this important 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 CMA says. “The CMA originally found that Microsoft already has a strong position in cloud gaming services and could have used its control over Activision content to stifle competition and reinforce this position. The new deal instead results in the cloud streaming rights for Activision’s games being transferred to an independent player, Ubisoft, maintaining open competition as the market for cloud gaming develops over the coming years.”
The CMA says it still has “limited residual concerns that certain provisions in the sale of Activision’s cloud streaming rights to Ubisoft could be circumvented, terminated, or not enforced”, but Microsoft has, in response, provided further remedies “to ensure that the terms of the sale of Activision’s rights to Ubisoft are enforceable by the CMA”. The regulator has now opened a consultation to go over these remedies until October 6.
The deadline for the proposed acquisition’s final approval is October 18, and in a statement on Twitter, Microsoft president Brad Smith has said that the company is “encouraged” by the recent positive developments in the CMA’s review process.
“We presented solutions that we believe fully address the CMA’s remaining concerns related to cloud game streaming, and we will continue to work toward earning approval to close prior to the October 18 deadline,” Smith wrote.
We are encouraged by this positive development in the CMA’s review process. We presented solutions that we believe fully address the CMA’s remaining concerns related to cloud game streaming, and we will continue to work toward earning approval to close prior to the October 18…
— Brad Smith (@BradSmi) September 22, 2023