EU backs Microsoft buying Call of Duty maker Activision

The US software giant still faces a battle to clinch its $69bn deal as Britain has blocked it and the US seeks to block.

Microsoft President Brad Smith addresses a media conference regarding Microsoft's acquisition of Activision Blizzard and the future of gaming in Brussels, Belgium
While Microsoft has won EU approval for its purchase of Activision Blizzard, the deal is still far from being done [File: Virginia Mayo/AP Photo]

Microsoft Corp has gained European Union antitrust approval for its $69bn acquisition of Activision on Monday, in a significant boost that could prompt Chinese and Korean regulators to follow suit despite a British veto of the deal.

The US software giant still faces a battle to clinch a deal. It has until May 24 to appeal a decision by Britain’s Competition and Markets Authority (CMA) to block it. A final decision may take months. The United States Federal Trade Commission’s case against the deal is also pending at the agency.

The European Commission said that the biggest-ever deal in gaming was pro-competitive due to Microsoft’s licencing deals.

Such licences are “practical and effective”, EU antitrust chief Margrethe Vestager told reporters.

“Actually they significantly improve the condition for cloud game streaming compared to the present situation, which is why we actually consider them pro-competitive,” she added.

The EU watchdog said Microsoft has offered 10-year free licencing deals to European consumers and cloud game streaming services for Activision’s PC and console games.

Microsoft has in recent months signed such deals with Nvidia, Nintendo, Ukraine’s Boosteroid and Japan’s Ubitus to bring Activision’s Call of Duty to their gaming platforms should the deal go through.

“The European Commission has required Microsoft to licence 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,” said Microsoft President Brad Smith.

Vestager said the Commission has a different assessment of how the cloud gaming market will grow in contrast with the United Kingdom.

“They see this market developing faster than we would think,” she said. “There is a bit of a paradox here, because we think that the remedies that we have taken will allow for licencing to many, many more in the cloud gaming markets.”

The UK Competition and Markets Authority said it stood by its veto. Microsoft will appeal to the Competition Appeal Tribunal, with a decision expected to take months.

The other remaining big hurdle is the US Federal Trade Commission, which is seeking to block the deal. Japan approved the takeover in March.

Source: Reuters