European Union Greenlights Microsoft’s Activision Blizzard Buyout

The European Commission formally approved Microsoft’s $69 billion acquisition of Activision Blizzard in May 2023, concluding that the merger would not significantly harm competition within the European Economic Area (EEA). The decision was predicated on specific, legally binding commitments from Microsoft designed to protect consumer access and market fairness. These conditions require Microsoft to grant free licenses to European consumers and cloud streaming providers, ensuring that Activision Blizzard’s PC and console titles remain accessible across various streaming platforms.

The Commission’s analysis determined that Microsoft would lack the incentive to withhold Activision’s content from competitors like Sony, noting that Sony maintains a dominant market position with a four-to-one console sales ratio over Microsoft in the EEA. Furthermore, the Commission concluded that even if Microsoft were to restrict access to specific titles, Sony possesses sufficient resources and a robust game catalog to remain a viable competitor. The ruling also addressed concerns regarding multi-game subscription services, finding that Activision would not have independently offered its games to such services, meaning the acquisition would not negatively alter the existing competitive landscape.

This approval aligns the European Union with other jurisdictions, including Saudi Arabia, Brazil, Japan, and South Africa, which had previously cleared the deal. While the United Kingdom’s Competition and Markets Authority and the United States’ Federal Trade Commission remained notable outliers at the time of the decision, the European Commission’s ruling served as a significant milestone in the regulatory approval process. An independent trustee was appointed to monitor Microsoft’s ongoing compliance with the mandated commitments to ensure the promised benefits to consumers and market competition are realized.