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£59 billion deal approved as Microsoft makes “gamechanging” concession

Microsoft’s £59bn acquisition of Call of Duty makers, Activision, has been cleared the regulators.

The Competition and Markets Authority said that a concession by Microsoft which didn’t include cloud rights within the deal was a “gamechanger.”

However, the CMA’s Chief Executive was clear that they weren’t happy with comments back in April. At the time, Activision said that the CMA’s decision to block the move showed the UK was “clearly closed for business” while Microsoft said it was “bad for Britain.”

“The CMA is resolute in its determination to prevent mergers that harm competition and deliver bad outcomes for consumers and businesses. We take our decisions free from political influence and we won’t be swayed by corporate lobbying,” stated Sarah Cardell, Chief Executive of the CMA.

“We delivered a clear message to Microsoft that the deal would be blocked unless they comprehensively addressed our concerns and stuck to our guns on that.”

Last month, a revised offer was submitted that would mean Activision’s cloud gaming rights would be bought by an independent third party – in this case Ubisoft, which has studios in Newcastle.

“With the sale of Activision’s cloud streaming rights to Ubisoft, we’ve made sure Microsoft can’t have a stranglehold over this important and rapidly developing market,” continued Cardell.

“As cloud gaming grows, this intervention will ensure people get more competitive prices, better services and more choice. We are the only competition agency globally to have delivered this outcome. 

“But businesses and their advisors should be in no doubt that the tactics employed by Microsoft are no way to engage with the CMA. Microsoft had the chance to restructure during our initial investigation but instead continued to insist on a package of measures that we told them simply wouldn’t work. Dragging out proceedings in this way only wastes time and money.”

CMA said that the newly restructured deal would prevent Microsoft from “locking up competition in cloud gaming” and preserve competitive prices and services for cloud gaming customers.

“Cloud gaming is an important new way for gamers to access games and this deal could have seriously undermined its potential development. On that we, the European Commission and the US Federal Trade Commission are in full agreement. Where we differ is on how we solve that problem. We rejected a solution put to us by the parties which would have left Microsoft with too much control,” added Martin Coleman, Chair of the Independent Panel who reviewed the original Microsoft deal.

“We now have a new transaction in which the cloud distribution of Activision games, old and new, is taken away from Microsoft and put into the hands of Ubisoft, an independent party who is committed to widening access to the games. That’s better for competition, better for consumers and better for economic growth.”

The acquisition includes major titles such as Call of Duty, Overwatch, and World of Warcraft.

Activision has a UK studio in Warrington.

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