European Union (EU) approves Microsoft $69 billion acquisition of Activision

Microsoft has received approval from the European Union (EU) for its $69 billion acquisition of Activision.

The EU approval comes after the merger was halted in the United Kingdom, but Microsoft’s vow to providing free 10-year licensing terms to gamers and cloud streaming competitors allayed EU regulators’ fears.

Microsoft’s decision has been judged pro-competitive, and it is likely to greatly improve the environment of cloud gaming streaming. The European Commission’s decision is consistent with a March report by Reuters.

The European Commission, the EU’s antitrust watchdog, approved Microsoft’s acquisition of Activision on Monday, marking the largest-ever deal in the gaming sector. Microsoft’s licensing agreements were critical in resolving regulatory problems.

Margrethe Vestager, the European Union antitrust chief, expressed her support for the deal during a press conference, highlighting the practicality and effectiveness of the licensing agreements. She emphasized that these agreements substantially improve the conditions for cloud game streaming, making them pro-competitive.

“The commitments offered by Microsoft will enable for the first time the streaming of such games in any cloud game streaming services, enhancing competition and opportunities for growth,” EU antitrust chief Margrethe Vestager said in a statement on Monday.

Microsoft’s offer of free 10-year licensing deals to European consumers and cloud game streaming services for Activision’s PC and console games was pivotal in securing the EU’s approval.

By providing access to Activision’s vast library of games through cloud streaming services, Microsoft aims to revolutionize the gaming landscape, allowing gamers to enjoy their favorite titles across various platforms. According to Microsoft, The 10-year licensing deals offer stability and long-term benefits for both gamers and cloud streaming providers, encouraging innovation and competition.

Optics

Microsoft’s interest in acquiring Activision is plausible given Activision’s renowned franchises and game titles, such as Call of Duty, World of Warcraft, and Candy Crush. Acquiring Activision would bolster Microsoft’s position in the gaming industry and further strengthen its Xbox platform and gaming services.

It’s worth mentioning that regulatory approval processes for major acquisitions can vary by jurisdiction, and different antitrust authorities may have differing opinions and requirements. This could explain the contrasting decisions between the US and UK’s veto and the EU’s approval in this hypothetical scenario.