Microsoft has obtained approval from the European Union (EU) for its $69 billion acquisition of Activision Blizzard. Yes, after the English body said no, now the European one says yes.
The deal, announced in January last year, has faced scrutiny from regulators around the world due to Microsoft’s dominant position in the video game industry.
However, after an exhaustive review, the European Union has given the green light to this important transaction. This is the first approval Microsoft has received, and almost the most important with the permission of the American regulator.
What is the agreement between Microsoft and Activision Blizzard?
Microsoft’s acquisition deal with Activision Blizzard has been a topic of great interest in the video game and technology industry. At first it was given that it was done… then came the problems.
And the EU approval is a significant milestone for both companies and may have major implications for the future of the industry by tipping the scales in their favor.
In January 2022, Microsoft announced its intention to acquire Activision Blizzard for €63 billion, which would represent the largest acquisition in the history of the video game industry.
The news generated a mixture of anticipation and concern among gamers, competitors and regulators, as Microsoft is an influential player in the video game market and there were fears that a monopoly could be created.
The review by the European Union, the most important player alongside regulators in the United Kingdom and the United States, has focused on whether Microsoft’s acquisition of Activision Blizzard would affect competition and limit choice for consumers.
The European Commission conducted a thorough investigation involving subject matter experts, consultations with third parties and a detailed analysis of data provided by the parties involved.
After an in-depth analysis, the EU has concluded that the settlement will not significantly harm competition in the video games market.
According to the European Commission’s statement, “The investigation has shown that there are sufficient strong competitors in the market and that consumers will continue to have a wide variety of gaming choices.”
The EU approval provides Microsoft with significant momentum to move forward with the deal. The company expects to close the acquisition in the coming months, once all necessary legal and regulatory requirements have been met.
The acquisition of Activision Blizzard will give Microsoft an extremely popular portfolio of games, including franchises such as Call of Duty, World of Warcraft and Candy Crush.
The deal is not yet closed and the United Kingdom is determined to prevent it
However, the acquisition has also raised legitimate concerns about the concentration of power in Microsoft’s hands.
The company already owns Xbox, one of the world’s most popular video game consoles, and its influence in the industry is undeniable. By acquiring Activision Blizzard, Microsoft would become an even more dominant force, and some critics fear that this could limit competition and innovation.
Faced with the positive announcement of the European Commission, the CMA has come out to say that although Europe is independent and they respect it, they are not going to change their verdict and the European Union has made a mistake with the ruling.
In other words, the CMA has come out to say publicly that they disagree with Europe’s decision and that, fundamentally, they were wrong not to see the dangers of the Microsoft-Activision deal.
The point here is that the European Commission was the hardest nut to crack and the one that has the most clout in the back end of this multi-billion dollar deal. The EU represents the most powerful market (vastly more than the UK and more so since Brexit).
The last big regulator, the one that will decide everything, will be the US Federal Trade Commission (FTC). What comes out of that commission will decide whether there is handshaking or whistleblowing at its discretion.
Some of the links added in the article are part of affiliate campaigns and may represent benefits for Softonic.
