Weeks after British regulators
blocked Microsoft’s $69 billion purchase of leading video game maker Activision Blizzard due to concerns over stifled competition in the cloud-computing gaming market, the European Union
commission has greenlighted the acquisition –– now the biggest tech deal in history –– with added oversight rules.
The deal had already
been scrutinized by regulators in the U.S. and Europe, as well as Sony who were all concerned that Microsoft would hold an unfair advantage in the console and PC gaming market, able to withhold
popular gaming franchises like “Call of Duty,” “World of Warcraft” and “Candy Crush” from rival gaming platforms, or encourage people to switch over to Xbox or
Windows.
“The only effective remedy is to prohibit the Merger,” stated the Competition and Markets Authority (CMA) in its final report, which focused primarily on the issue of
cloud gaming and the unfair advantage Microsoft may have via Windows’ potential as a “significant cloud infrastructure.”
Microsoft issued a statement, calling it “probably
the darkest day in our four decades in Britain.” The company added that the wrong message was being sent to the global tech industry about the UK, while an Activision spokesperson said the
UK’s conclusions were “a disservice to UK citizens, who face increasingly dire economic prospects.”
Now, after pushing its official decision back almost a full month, the EC
has okayed the deal, noting that the approval is “conditional on full compliance with the commitments offered by Microsoft.”
The EC did express similar concerns to those of the UK
watchdog -- that if Microsoft made Activision games exclusive to Game Pass Ultimate, its own streaming service, it might reduce competition in a developing market.
Microsoft, in response,
promised to allow all consumers in the European Economic Area (EEA) to stream all current and future Activision games through any cloud-based game streaming service for the next decade.
The EC
has also made plans to check up on how Microsoft's decisions affect rival gaming companies via an appointed “independent trustee” that will monitor the fulfillment of the tech
giant’s commitments.
After the EC made its decision, Activision CEO Bobby Kotick said that the EC “conducted an extremely thorough” investigation
into the matter, adding that Activision will invest more in the EU as it moves forward.
In a series of tweets, the CMA stood by its original decision to
reject the acquisition, concluding “that cloud gaming needs to continue as a free competitive market to drive innovation and choice in this rapidly evolving sector.”
The CMA
added that Microsoft's proposals “would allow Microsoft to set the terms and conditions for this market for the next 10 years” and “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.”
Microsoft and Activision will now combine forces to
overturn the UK’s decision through the official appeals process.