More than a year and a half after identifying its target, Microsoft is in the process of overcoming a significant obstacle in its quest to acquire Activision Blizzard, the publisher of popular video games such as “Call of Duty,” “World of Warcraft,” and “Candy Crush.” The British competition authority, CMA, announced on Friday that it is granting a “provisional” approval to Microsoft’s new acquisition agreement, which was proposed after the CMA rejected their initial proposal in April last year.
In its statement, the CMA believes that Microsoft has “proposed additional protections” that limit the risk of the merger resulting in the formation of a harmful video game empire for competition in the industry. The authority now only has “limited residual concerns” about this merger. It has opened a consultation until October 6th on the modifications proposed by Microsoft. In other words, if Microsoft’s competitors, including Sony and Google, still oppose the merger, they have until this date to explain their arguments to the CMA.
Ubisoft has acquired the rights to “Call of Duty” and “Candy Crush”.
To regain the favor of the CMA, the manufacturer of the Xbox gaming console submitted an amended version of its $69 billion acquisition proposal to the British authority in August.
In this new version, the software giant plans to sell the rights to some highly popular online games from Activision Blizzard, including the worldwide successes “Call of Duty” and “Candy Crush”, to French company Ubisoft before the acquisition by Microsoft. Microsoft will also have the right to sell licenses for Activision content to any digital game provider. The goal is to allow players to access Activision games in different ways, according to Sarah Cardell, the CEO of the CMA.
La CMA invoquait le 26 avril, en bloquant cette méga-fusion, des risques trop élevés pour la concurrence. Microsoft avait contesté cette décision qui devait être portée en justice. Microsoft et la CMA avaient finalement convenus début juillet de suspendre la procédure judiciaire et de trouver un terrain d’entente, ce qui devait passer par de nouvelles propositions du groupe américain.
At the end of July, Microsoft stated that the circumstances have changed since its veto in late April, citing its commitments to the EU. Indeed, in May, the European Commission approved the largest tech acquisition in history, which would make Microsoft the world’s third-largest player in the industry, behind Chinese Tencent and Japanese Sony, the maker of PlayStation. “The commitments accepted by the European Commission provide a legal framework” for licensing agreements with several companies in the cloud gaming sector, Microsoft argues. These commitments “impose a legally binding ten-year obligation on Microsoft to grant worldwide royalty-free licenses” as well as “severe regulatory sanctions in case of violation.”
Série de revers de la FTC américaine pour bloquer l’acquisition
The sky appears to be clearing for the mega-merger, despite the strong opposition from the Federal Trade Commission (FTC), the US competition authority. In December last year, the powerful agency led by Lina Kahn, known for her firm stance against the dominant position abuses of big tech companies, initiated proceedings to block the acquisition, arguing that it posed a threat to competition. “By controlling Activision’s content, Microsoft could and would have an interest in withholding or reducing the quality of this content in a way that would weaken competition, including in terms of quality, price, and innovation,” said the federal agency. This reasoning is not without common sense and is based on the experience of the past decade, where certain strategic acquisitions, such as Instagram by Facebook, have hindered innovation in certain sectors.
In May, the FTC also initiated a civil action in federal court in California. Last week, a federal judge dismissed the FTC’s request to suspend the transaction. According to Jacqueline Scott Corley, the agency “failed to demonstrate its ability to prove that this operation could weaken competition in this industry.”
Le régulateur a alors saisi une cour d’appel fédérale, qui lui a également donné tort. En juillet, la juge de la Cour suprême Elena Kagan, chargée d’examiner le dossier au nom de la plus haute juridiction du pays, a rejeté une demande de suspension soumise par des joueurs.
The administrative procedure remained the last recourse to block this acquisition, but at the end of July, the FTC suspended its procedure due to a series of legal setbacks. However, the agency may choose to resume its action later, but the temporary approval from the British CMA suggests that regulators seem to have lost this battle.
Comments are closed.