EU regulators approve Microsoft’s $69 billion acquisition of Activision Blizzard:
European Union regulators gave the green light for Microsoft’s $69 billion acquisition of Activision Blizzard, one of the world’s largest gaming firms. The EU’s executive arm, the European Commission, approved the deal after Microsoft offered remedies in the emerging area of cloud gaming that would allay antitrust concerns.
Remedies offered by Microsoft:
The remedies Microsoft offered centered around allowing users to stream Activision games they purchase on any cloud streaming platform. This was a critical concern for regulators globally, who were probing whether Microsoft’s acquisition of Activision could distort competition in the console and cloud gaming market.
The UK’s competition authority blocked the deal last month over concerns it would reduce competition in the nascent cloud gaming market. The authority feared that Microsoft would make Activision’s key games, such as Call of Duty, exclusive to its own cloud gaming platforms, a move that would harm competition.
Impact on competition in the console and cloud gaming market:
Microsoft has staked its future in the gaming market on cloud gaming, a nascent part of the industry. The EU Commission found that the Activision takeover would not reduce competition in the console market given Sony’s dominance with the PlayStation.
Cloud gaming allows people to stream games from servers, removing the need for expensive dedicated hardware such as consoles. These games could be played on existing devices like TVs, smartphones, and laptops. The key to success for cloud gaming is a large catalogue of games that users could immediately access via a subscription service, like Netflix.
Microsoft’s solution to allay competition concerns:
Microsoft will offer royalty-free licenses to cloud gaming platforms to stream Activision games if a consumer has purchased them. Consumers who have bought or will buy an Activision game will be able to stream these titles on any cloud gaming platform of their choice. The idea is that gamers do not necessarily need to stream the game where they buy it.
U.S. Federal Trade Commission’s ongoing investigation:
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.
European Union (EU), key points:
The European Union (EU) is a political and economic union of 27 member states located primarily in Europe. It was established with the aim of promoting peace, stability, and economic cooperation among its member states.
Here are some key points about the EU:
- Member States: As of May 2023, the EU had 27 member states. However, please note that the membership might have changed since then. The member states at that time were: Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, and Sweden. The United Kingdom was also a member until January 31, 2020, when it formally left the EU.
- Single Market: The EU operates a single market, which allows for the free movement of goods, services, capital, and people within its member states. This promotes trade and economic integration among the participating countries.
- Eurozone: The Eurozone is a subset of EU member states that have adopted the euro as their common currency. As of September 2021, the Eurozone consisted of 19 countries: Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Portugal, Slovakia, Slovenia, and Spain.
Institutions: The EU has several institutions that play different roles in its functioning. The main institutions include the European Commission (executive branch), the European Parliament (legislative branch), the Council of the European Union (representing member states’ governments), the European Council (setting the EU’s political agenda), and the Court of Justice of the European Union (ensuring the interpretation and application of EU law).