Leaks Suggest EU Set To Approve Microsoft, Activision Acquisition

Legal Issues

from the so-much-for-that dept

For months and months now, we have been talking about Microsoft’s proposed acquisition of Activision Blizzard. The $68 billion mega-deal had drawn narrow glares from several regulatory bodies, including in America, the UK, and the EU. While the FTC in the States and CMA in the UK have thus far not come off some very strongly worded concerns about approving the purchase, the EU appears like it will be the first domino to fall in this whole thing moving forward.

According to Reuters, the European Commission is not expected to ask Microsoft to divest large parts of Activision—like separating out its Call of Duty business—to win approval. Instead, long-term licensing deals of lucrative games that Microsoft has offered to rivals could suffice, in addition to agreeing to “other behavioral remedies to allay concerns of other parties than Sony,” one insider told Reuters.

This was exactly Microsoft’s playbook. The company announced the deal and then started making all sorts of wishy-washy comments about what franchises would be exclusive, how they would be exclusive, which ones wouldn’t be exclusive, and varying lengths of time it would promise to make non-exclusives available on which platforms. When that didn’t satisfy literally anyone — because how could it? — the company pivoted to inking 10 year promises for major franchises like Call of Duty appearing on competing platforms, such as Nintendo and Sony’s consoles.

Which might mean that Microsoft intends to keep these titles multi-platform for longer than that. Or Microsoft could be playing the long game here, willing to be multi-platform for a decade only to claw those franchises, or new franchises, back to exclusivity in the 2030s. Who knows? Not these EU regulators, but that apparently doesn’t matter.

Microsoft appears to being trying to get creative with the UK as well.

Microsoft got its big chance to sway the UK this week when it attended a private hearing with UK’s antitrust watchdog, the Competition and Markets Authority (CMA), to discuss “feasible remedies,” Bloomberg reported. Sources said that Microsoft offered to pay a third-party monitor to oversee the company’s compliance with any behavioral remedies proposed by the UK to approve the deal. The CMA is expected to make its decision on April 26.

We shall see if the CMA, like the EU, is willing to give into this sort of easily circumvented window dressing.

Now, to be clear, acquisitions, even massive ones, aren’t always bad in general, nor bad for the market. In times of economic turmoil, it’s quite common to see industries consolidate for a period of time, where large entities gobble up smaller ones that cannot survive the bad times. That culling of the industry can be a good thing, opening up space for new startups to break into the market when the lean times get better.

But none of that makes what Microsoft is doing to get the regulators to play ball any less suspect. Nor are comments like this.

An Activision spokesperson told Ars that the merger would help the company continue to make multi-platform games that can compete in an “industry dominated by growing competitors.” Activision’s spokesperson also said that the solutions Microsoft has presented “are legally binding, and beyond that, our passionate player community would hold Microsoft accountable for keeping its promises.”

That last bit is pure fantasy. That just isn’t how monopolistic practices work. The market can’t hold Microsoft accountable if the most major gaming franchises are taken exclusive. Or, rather, it could… but won’t.

Otherwise, we’d see Nintendo games be far more cross-platform. And they most certainly are not.

Filed Under: antitrust, call of duty, uk, us
Companies: activision, microsoft