BRUSSELS, May 15 (Reuters) – Microsoft Corp ( MSFT.O ) won EU antitrust approval on Monday for its $69 billion takeover of Activision ( ATVI.O ), prompting Chinese and South Korean regulators to follow suit anyway can do. Britain vetoed the treaty.
The US software giant is still fighting to capture the world’s largest gaming industry. The UK’s Competition and Markets Authority (CMA) has until May 24 to appeal its ban. A final decision could take months.
The US Federal Trade Commission’s lawsuit against the deal is also pending at the agency, although Japan approved it in March.
The European Commission confirmed a Reuters report in March, saying the transaction was anti-competitive because Microsoft licenses popular Activision games such as “Call of Duty” to rival game streaming platforms.
European Union antitrust chief Margrethe Vestager told reporters that such licenses are “practical and effective.”
“In fact, they significantly improve the conditions for cloud gaming streaming compared to the current situation, so we see them as really competitive,” he added, contradicting the UK’s position that the deal would hurt competition in that part of the market.
In rejecting the deal, the UK watchdog was seen as flexing its muscles in the global regulatory phase since Brexit.
Microsoft has in recent months signed licensing deals with Nvidia ( NVDA.O ), Nintendo ( 7974.T ), Ukraine’s Boosteroid and Japan’s Ubitus to bring Activision games to their platforms if the deal is struck.
“The European Commission has required Microsoft to automatically license popular Activision Blizzard games to competing cloud gaming services. This will apply globally and allow millions of consumers around the world to play these games on any device they choose,” Microsoft President Brad Smith said.
Activision shares were up 1.3% at 1650 GMT, while Microsoft shares were little changed.
THE GROWTH OF THE CLOUD GAMING MARKET
Vestager said the Commission had a different view from UK regulators on how the game streaming market, which accounted for just 1% of the total market last year, would develop.
“They see this market growing faster than we thought,” he said. “There’s a bit of a paradox here, because we think the tools we’re adopting … will allow us to license more and more people in the cloud gaming markets.”
Britain’s CMA said streaming is the fastest-growing sector in gaming, while consoles are a mature market. It said Microsoft already accounts for 60-70% of global cloud gaming services and has other trump cards: Xbox, leading PC operating system Windows and cloud provider Azure.
The CMA said it stood by its veto on Monday. Microsoft said it would appeal the decision to the Competition Appeal Court, which would take months.
Alex Haffner, a partner at London law firm Fladgate, said the EU move would give the CMA’s critics ammunition against the agency.
“Critics of the CMA’s stance, many of whom will be reluctant to accept today’s decision, will argue that the UK’s regulatory regime is too rigid and stifles innovation,” he said.
“Lawyers for Microsoft and Activision will also use the decision to provide more ballast to their appeal against the CMA’s decision.”
Report by Foo Yun Chee
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