Microsoft closes $69b deal for Activision
Overcomes US, UK regulatory hurdles for big tech victory
Microsoft on Friday said it closed its $69 billion purchase of the video game giant Activision Blizzard, overcoming significant regulatory hurdles in Britain and the United States and signaling that the tech industry’s giants are still free to use their cash hoards to get even bigger.
The deal, the largest consumer tech acquisition since AOL bought Time Warner more than two decades ago, won approval from British regulators on Friday, the last remaining regulatory obstacle.
The completion of Microsoft’s Activision acquisition is a clear signal that several years of governments around the world scrutinizing big tech companies have so far done little to curb their power, their growth, or their ability to ink megadeals. And the deal could provide a blueprint for other big tech companies on how to successfully fend off the intervention of regulators.
Microsoft overcame roadblocks in multiple countries from government officials who said the merger would dampen competition in the video game industry.
Their challenges were part of a larger effort by governments around the world to take action against tech companies like Microsoft, Google, Apple, Amazon, and Meta, which owns Facebook. The Federal Trade Commission tried to stop Meta from buying a startup that makes a virtual reality fitness game. The Justice Department last year sued to stop a deal for a health tech company it said would give one of the nation’s largest insurers data about its competitors.
But both of those challenges were unsuccessful. Although regulators have succeeded in blocking or forcing companies to abandon some deals — including in publishing, aerospace, and semiconductor manufacturing — they have yet to score a major victory against one of the giant digital platforms that dominate online commerce.
Regulators are nonetheless pushing ahead with cases against tech companies. The Justice Department is in the middle of a trial against Google, arguing the company abused its power as a monopoly over online search. The FTC is pursuing a monopoly lawsuit of its own against Meta, arguing the company used the acquisitions of Instagram and WhatsApp to stamp out future competitors. In September, it sued Amazon, saying the company had hindered competition when it squeezed merchants and favored its own services.
Microsoft navigated a tricky process for its megadeal that included securing approval from dozens of countries. It agreed to offer continued access to one of Activision’s flagship franchises, “Call of Duty,” on game platforms from other companies like Nintendo and Sony.
In April, Britain’s regulatory agency, the Competition and Markets Authority, dealt the deal a significant blow by blocking its approval in Britain. But the regulator reversed its decision after Microsoft agreed to license to a rival a part of Activision’s business associated with so-called cloud gaming, a small but promising new area for the industry.
The FTC unsuccessfully sought a preliminary injunction against Microsoft in the United States, which would have delayed the deal’s closing and potentially doomed it to a drawn-out legal appeals process. The agency has appealed that ruling, but the deal was able to close while that legal process plays out.
Phil Spencer, the CEO of Microsoft Gaming, celebrated the deal’s closure in a blog post Friday, nodding to the concerns from rivals and regulators about players without an Xbox losing access to Activision’s games.
“Whether you play on Xbox, PlayStation, Nintendo, PC, or mobile, you are welcome here — and will remain welcome, even if Xbox isn’t where you play your favorite franchise,” he wrote.
Microsoft has not fully satisfied regulators and it is taking a calculated risk that it will not be forced to unwind the acquisition years down the line. An FTC case against the combination is still pending in its administrative court, in a process that can take years to resolve.