EU approves Microsoft’s $69 billion acquisition of Activision Blizzard, clearing major hurdle

European Union regulators on Monday approved Microsoft’s proposed $69 billion acquisition of gaming firm Activision Blizzard, subject to remedies offered by the U.S. tech giant.

The European Commission, the EU’s executive arm, said that Microsoft offered remedies in the nascent area of cloud gaming that have staved off antitrust concerns. These remedies centered on allowing users to stream Activision games they purchase on any cloud streaming platform.

Europe’s green light is a huge win for Microsoft, after the U.K.’s top competition authority last month blocked the deal.

Regulators globally have been probing whether Microsoft’s acquisition of Activision could distort competition in the console and cloud gaming market. One area regulators questioned is whether Microsoft might take Activision games and keep them exclusively on the U.S. giant’s own platforms.

Activision is behind some of the biggest console and PC games in the world, including the Call of Duty franchise and World of Warcraft.

The EU decision comes after the U.K. Competition and Markets Authority last month blocked the deal over concerns that it would reduce competition in the nascent cloud gaming market. The CMA said that Microsoft would find it commercially beneficial to make Activision’s key games, such as Call of Duty, exclusive to its own cloud gaming platforms. The CMA nevertheless said the acquisition would not reduce competition in the console market.

Microsoft has faced opposition to the deal from regulators and some of its rivals, including PlayStation games console maker Sony.

Microsoft sought to allay the Commission’s concerns over making Activision games exclusive ahead of the EU decision. Microsoft President Brad Smith met with EU officials in February, after which the tech giant said it would bring Xbox PC games to Nvidia’s cloud gaming service. The chipmaker had reportedly expressed opposition to the acquisition takeover.

The British regulator was concerned about Microsoft’s ability to secure a dominant position in cloud gaming before it even takes off.

EU regulators found that Microsoft would harm the competition in the distribution of PC and console games via cloud gaming services, as a result of the acquisition. One way competition would be hurt were if Microsoft made those Activision games exclusive to its own platform, the Commission said.  

But the European Commission said Microsoft offered remedies to allay competition concerns. Consumers that have bought or will buy an Activision game will be able to stream these titles on any cloud gaming platform of their choice. Microsoft will also offer royalty-free licenses to cloud gaming platforms to stream Activision games, if a consumer has purchased them. The idea is that gamers do not necessarily need to stream the game where they buy it.

A senior official at the European Commission told reporters on Monday the move will increase competition in the market and allow streaming platforms that didn’t have access to Activision games to now have them.

Despite the EU approval, Microsoft still faces a tough task of convincing rivals such as Sony and other regulators, including the U.S. Federal Trade Commission, that the Activision takeover will not harm competition.

The case between the FTC and Microsoft is still ongoing. A senior Commission official said the EU has exchanged views with the FTC on several occasions and has had close co-operation regarding it.