UK’s regulator says EU is wrong to approve Microsoft’s Activision deal

The UK’s competition watchdog has issued a strongly-worded rebuttal to news that the European Commission has approved Microsoft’s proposed Activision Blizzard acquisition.

On Monday, the EU confirmed it had cleared the deal, after Microsoft agreed to comply with a number of commitments related to the cloud gaming market.

The ruling arrives shortly after the UK’s competition regulator decided to prevent the $69 billion deal, which it claimed would stop the acquisition from happening globally.

The UK regulator is seen as one of the most influential in deciding the deal’s fate, alongside the EU and the US.

Responding to Monday’s EU decision, Sarah Cardell, CEO of the Competition and Markets Authority (CMA), suggested the EU Commission was wrong to approve the deal.

“The UK, US and European competition authorities are unanimous that this merger would harm competition in cloud gaming,” Cardell wrote. “The CMA concluded that cloud gaming needs to continue as a free, competitive market to drive innovation and choice in this rapidly evolving sector.

“Microsoft’s proposals, accepted by the European Commission today, would allow Microsoft to set the terms and conditions for this market for the next ten years. They would 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.

“This is one of the reasons the CMA’s independent panel group rejected Microsoft’s proposals and prevented this deal. While we recognise and respect that the European Commission is entitled to take a different view, the CMA stands by its decision.”

While the EU’s investigation into the deal agreed that it could harm competition in the distribution of games via cloud game streaming services, it said it had agreed new licensing commitments to ease concerns, with a 10-year duration.

That includes a free license to consumers in the EEA that would allow them to stream, via any cloud game streaming services of their choice, all current and future Activision Blizzard PC and console games for which they have a license.

Further reading

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The European Commission has cleared Microsoft’s acquisition of Activision Blizzard

The approval is subject to Microsoft licensing Activision Blizzard games automatically to rival cloud gaming services

Microsoft will also offer a corresponding free license to cloud game streaming service providers to allow EEA-based gamers to stream any Activision Blizzard’s PC and console games.

Under the supervision of the Commission, an independent trustee will be charged with monitoring the implementation of these remedies.

Microsoft and Activision previously confirmed their intention to appeal the CMA’s ruling, which the former has called “bad for Britain” and the latter has labelled “irrational”.