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UK Competition Watchdog Approves Microsoft’s Acquisition of Activision Blizzard

The British competition watchdog has approved the implementation of a deal for Microsoft to acquire the video game firm, Activision Blizzard.

UK Competition Watchdog Approves Microsoft’s Acquisition of Activision Blizzard

Obtaining permission to implement a commercial agreement from a regulator in the United Kingdom marks the overcoming of the last obstacle by companies on the way to the goal. The value of this transaction, which is the largest in the history of the video game industry, is $69 billion.

The British Competition and Markets Authority (CMA) on Friday, October 13, announced that Microsoft’s restructured offer to sell the rights to some games to the French publisher Ubisoft Entertainment SA eliminates all the concerns of the regulator which, as part of the initial analysis of the acquisition of Activision Blizzard by the technology giant, stated the potential likelihood of a negative impact of this intention on the state of affairs in terms of aspect of competition. The agency claims that the decision offered by a company from the United States to keep the cost of products at a competitive level will become a favorable influence on the quality of service.

Over the past few months, the prospects of the deal have been covered with a veil that came from the Foggy Albion. Some experts spoke about the minimal probability that the decision of the British regulator will be positive for Microsoft.

At the same time, in other countries, the technology giant also faced difficulties approving its intentions, but the position of the CMA in this case was the toughest and had no hints of favor at least in the future. The final decision of the British regulator was still positive for Microsoft, although the company had to make some concessions, but the goal was achieved, and this victory is clearly not Pyrrhic. In a sense, in this case, the public can observe a story with a happy ending that took place, despite the seeming impossibility of a favorable outcome. In this example, there is also some shade of a cinematic ideological standard about a victory that no one believed in.

It is worth noting that certain signs that the technology giant can potentially achieve what it wants appeared after Microsoft won a lawsuit court challenge against the US Federal Trade Commission (FTC). This result of the confrontation with the regulator did not radically change the then pessimistic attitude of many experts towards the overall result, but it suggested that the black clouds that had gathered over the technology giant as part of attempts to implement the deal could let the rays through.

The European Union has cleared the deal with behavioral remedies. After that, the position of the British regulator became the only obstacle to the implementation of the transaction. CMA chief executive Sarah Cardell said the tech giant would not receive approval unless all the agency’s concerns were comprehensively addressed.

By the summer, Microsoft had re-submitted a new version of the deal to the British watchdog as part of a last-ditch attempt to have the agreement, including the blockbuster title Call of Duty, reviewed.

The tech giant and Activision have agreed to extend the deal until October 18.

Brad Smith, vice chairman of Microsoft, commenting on the decision of the British regulator, said that the last obstacle to the acquisition of a video game company had been overcome. According to him, the implementation of this transaction will benefit players and the gaming industry around the world.

After completing all procedures related to the acquisition of Activision Blizzard, Microsoft will oversee some of the most legendary gaming franchises, including Call of Duty, Candy Crush, and Diablo mobile games.

Over the past few years, the technology giant has shown a high level of activity in acquiring gaming companies. Microsoft is committed to ensuring that the best games are presented in its ecosystem of Xbox consoles, Windows PCs, and Game Pass subscription service. Currently, the tech giant ranks third among console companies after Sony and Nintendo.

From a commercial point of view, Microsoft’s efforts are a logical and expedient step, since a stable presence in the mobile games market, the value of which is estimated at $93 billion, is obviously profitable. The company’s management stated that the deal to acquire Activision Blizzard is a way to penetrate the mentioned space. The British watchdog has been focused for a long period on the potential of the tech giant to take a dominant position in the cloud gaming market, which is currently in the formative stages.

With Activision Blizzard games, Microsoft will be able to gain more customers for its cloud gaming service, the Game Pass feature. Analysts say that cloud games remain niche. Google and Amazon have struggled to gain a foothold in it.

The European authorities said that the changes in the deal, thanks to which the approval of the British watchdog was obtained, do not need to be further coordinated in Brussels. The relevant information is contained in the official statement of the EU, which was published on October 13. The European Commission reported that the British obligations of the technology giant do not interfere with its activities in Europe.

The FTC, having failed to stop the process of completing the transaction, continues to seek its cancellation even after the issue of implementation is a matter of time, and no longer faces actual obstacles. Experts say that the efforts of the American regulator, most likely, will in no way affect the acquisition of Activision Blizzard. In their opinion, the probability that the current activity of the FTC may have consequences for Microsoft is minimal. The American regulator announced its intention to continue internal proceedings on the fact of this transaction.

On October 13, the CMA announced the identification of limited residual problems with the new version of the deal but hastened to clarify that Microsoft has committed itself to making the terms of the rights sold to Ubisoft enforceable by the watchdog.

A representative of Activision Blizzard said that the approval of the British regulator is great news for the company’s future with Microsoft.

As we have reported earlier, Microsoft to Contest US Tax Authority’s Request to Pay Additional $28.9 Billion.

Serhii Mikhailov

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Serhii’s track record of study and work spans six years at the Faculty of Philology and eight years in the media, during which he has developed a deep understanding of various aspects of the industry and honed his writing skills; his areas of expertise include fintech, payments, cryptocurrency, and financial services, and he is constantly keeping a close eye on the latest developments and innovations in these fields, as he believes that they will have a significant impact on the future direction of the economy as a whole.