Microsoft’s $69 billion bid to acquire video game company Activision Blizzard came Monday after European Union regulators approved it to be the biggest consumer tech deal in two decades. A glimmer of hope appeared.
EU officials said they would allow The deal comes after Xbox console maker Microsoft conceded to allow rival companies continued access to Activision-developed games, including the wildly popular Call of Duty.
Yet the blockbuster acquisition, which has become a test of whether regulators around the world will approve the tech mega-merger, still faces an uphill climb amid concerns over the power of the industry. Regulators in the U.S. and U.K. have each moved to block the acquisition in recent months, claiming the combination was fraudulent. Of the Xbox maker that owns the company The ‘Call of Duty’ franchise could stifle competition. Microsoft is fighting both actions.
The deal has exposed a rift between regulators over how to curtail the power of the world’s biggest tech companies.
Some of the opposition to the acquisition centers on so-called cloud gaming. It’s a relatively new technology that allows people to stream games on their phones, tablets and other devices, potentially eliminating the need for hardware such as consoles. Regulators in the US and UK said Microsoft’s acquisition of Activision would undermine the fledgling sector of the gaming industry before it blooms. Approved by European Commission, Enforcement Authority of 27-Country Block, after Microsoft agreed to ensure gamers can play Activision titles on cloud gaming services developed by others such as Nvidia gave
After negotiating concessions with Microsoft, European Union officials said they had come to the conclusion that a deal could be reached, especially since the cloud gaming market is still very small.
“These commitments fully address the competition concerns identified by the Commission,” the EU regulator said in a statement.
The European Commission also said the deal would not hurt the console market as Microsoft has no incentive to refuse. Rivals such as Sony PlayStation gain access to Activision titles without sacrificing profit. In the European Union, PlayStation has a much larger market share than Xbox. Officials also noted that Microsoft and Activision have relatively small mobile game market shares, accounting for about half of the total European Union video game market.
The approval is a rare opportunity for European regulators to appear more tolerant of the tech industry than the U.S. does. For years, Europe’s antitrust regulators, led by Margrethe Vestager, have aggressively pursued big tech companies such as Google, fined them billions of dollars or ordered them to change certain business practices. rice field.
Now the US is taking a tougher stance under Federal Trade Commission Chairman Rina Khan, who has put the merger challenge at the heart of her plan to curb the tech giants. In December, the FTC filed a lawsuit seeking an injunction against Microsoft’s acquisition of Activision, arguing that the deal would harm consumers and separate gamers from rivals. UK regulators followed suit last month by rejecting the deal, fearing it would hurt the cloud gaming market.
The approval in Brussels sets up a complicated legal chessboard for Microsoft and Activision with few hands left. Going forward, the fate of this agreement will largely rest on US and UK legal proceedings.
The companies will have to demonstrate that the deal will not restrict competition, especially if Microsoft guarantees access to Activision titles. U.S. courts show they can be more willing to overturn government antitrust laws In the UK, it is less common for verdicts by the country’s main antitrust regulator, the Competition and Markets Authority, to be overturned.
The video game industry and the technology it uses are globalized and interconnected, and by their very nature, the loss of either appeal could prove fatal to the deal.
