UK’s CMA greenlights Microsoft-Activision deal after cloud gaming concession

The UK’s competition watchdog, the Competition and Markets Authority (CMA) has finally approved Microsoft’s acquisition of gaming giant Activision after the latter agreed to sell its cloud gaming activity outside of Europe to French gaming outfit Ubisoft.

Microsoft made the concession in August to secure approval of the deal ahead of the October 18 deadline, when it was due to expire.

The CMA, which had previously nixed the acquisition, agreed to launch a new probe after Microsoft made the concession, which will put cloud streaming rights outside the European Economic Area to Activision’s PC and console content produced over the next 15 years in the hands of Ubisoft

The CMA said that the new deal will stop Microsoft from locking up competition in cloud gaming as this market takes off, preserving competitive prices and services for UK cloud gaming customers. It will allow Ubisoft to offer Activision’s content under any business model, including through multigame subscription services. It will also help to ensure that cloud gaming providers will be able to use non-Windows operating systems for Activision content, reducing costs and increasing efficiency.

The CMA has characterized Microsoft’s move as a victory after the software giant was highly critical of its approach, which set it apart from regulators in Europe and to a lesser extent the US.

The US Federal Trade Commission tried but failed to stop the deal going through, but a court ruling (which the FTC is still challenging) denied its request for a restraining order.

“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. 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,” said CMA CEO Sarah Cardell.

“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. 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.”