EU agrees Activision Blizzard acquisition by Microsoft
A nightingale must be able to sing, a greyhound must be able to run. And capitalists have to gobble up corporations until you can buy everything from toothbrushes to aircraft carriers from the same corporate entity. Today we have come a little closer to that seemingly inescapable future: if it is up to the EU, Activision Blizzard may continue under the Microsoft banner.
EU tack
Since January of last year, Microsoft has been busy with the acquisition of competitor Activision Blizzard, itself an amalgamation of what used to be two independent operations: Activision (known for mega hit Call of Duty) and Blizzard (MMO World of Warcraft, still the largest in the world). its kind). Of course, this does not go without a hitch. Government regulators such as the American FTC, the British Competition and Markets Authority (CMA) and the European Commission must approve the deal. This is mainly to prevent monopoly formation.
The takeover will cost a paltry $69 billion. The biggest deal in gaming history. When the deal is done, Microsoft can put yet another notch on its bedpost. Microsoft’s gaming division already includes 23 companies, including big names such as 343 Industries (Halo), Mojang (from Minecraft), Obsidian (Pillars of Eternity and Outer Worlds) and Bethesda (Elder Scrolls and Fallout). In addition, Microsoft has its own line of gaming consoles, the XBox. With the hypothetical acquisition of Activision Blizzard, the company forms a significant block in the game industry. If the acquisition goes through, the company will become the third largest publisher of games in the world (Tencent and Sony).
But according to the EU, it is not a monopoly. According to the European Commission, Microsoft has made concessions in order not to restrict competition too much. For example, in the rapidly growing field of cloud gaming services. Microsoft will not offer Activision titles exclusively on its own streaming service for the next ten years, nor will it limit the quality or availability of specific content on other services. According to the Commission, the deal is a significant step forward on the current situation.
Doubts elsewhere
Strangely enough, they think differently in the United Kingdom and the otherwise laissez faire United States. The FTC has filed a lawsuit to block the acquisition. The FTC is concerned about the potential impact of the acquisition on consumer and employee rights and the company’s competitive position.
It is a surprisingly quick response from the US regulator. According to reports, the FTC does not want to risk facing a fait accompli if the EU does approve the deal. Possibly in response to the lawsuit, Microsoft launched a PR campaign highlighting the pro union stance the company says it is taking. A topic not just chosen, given the resistance shown by Activision Blizzard in this area.
The CMA even goes a step further than the FTC. The CMA is currently blocking the deal due to concerns about competitiveness. Microsoft is currently fighting the decision and they should. Unlike the FTC, the CMA has legal authority to stop the deal. On May 11, the regulator issued an interim order stating that even when it comes to buying each other’s stock, Microsoft and Activision must seek Blizzard’s approval first.
For the time being await course of lawsuits
It remains to be seen whether the deal will actually be completed. With the approval of the European Commission, Microsoft strengthens its position against the resistance of both the CMA and the FTC. However, those two won’t just tack. As indicated earlier, the lawsuit filed by the FTC cannot directly block the deal without further legislation. The eyes are therefore mainly focused on the appeal of the decision of the CMA.
