EU waves through videogame deal

EU regulators have broken from their counterparts in the UK and US by clearing Microsoft’s $75bn acquisition of Activision Blizzard, say Javier Espinoza and Tim Bradshaw in the Financial Times. Competition authorities in Brussels said Microsoft had made enough concessions to allay their doubts, including allowing all Europeans purchasing an existing or future Activision game to stream it on all cloud game-streaming providers for a decade.

The EU’s decision “removes an important hurdle” for the two firms, which would jointly create the third-biggest gaming company by sales behind China’s Tencent and Japan’s Sony. The two agencies’ reasoning “couldn’t be farther apart”, says Dan Gallagher in The Wall Street Journal. While Britain’s Competition and Markets Authority (CMA) vetoed the deal “in the belief that it would give Microsoft too much power in the nascent cloud-gaming market”, Brussels said the deal would “represent a significant improvement for cloud gaming as compared with the current situation”. While the decision by the EU certainly gives Microsoft and Activision a symbolically “important win”, the ultimate fate of the deal “is still far from certain”. Brussels’ decision certainly “raises questions about the credibility of the CMA in a big test of its “post-Brexit approach to global deal-making”, says the Times. But it’s still “unclear” how the merger can go through. While Microsoft is appealing the CMA’s decision, the Competition Appeal Tribunal can only overrule the CMA “if it finds that it erred in law or acted irrationally in making its decision”. If the decision is upheld then the only option would be to try to “restructure the deal to carve out Britain” – no mean feat given the size of the UK market. In any case, the US Federal Trade Commission has sued Microsoft to block the merger. A court will hear the case in August.