Microsoft’s Activision acquisition has now been approved by South Korea

Update 30/5: The South Korean Fair Trade Commission has now become the latest body to approve of the Microsoft Activision deal, as an increasing number of bodies give their thumbs up despite the UK’s own block of the proposed deal.

As noted by VGC, the KFTC says that it’s “unconditionally cleared” the deal, and claims that it has “no concerns” about the potential restriction. Amusingly, the statement also apparently claims that “The combined market share of games developed and distributed by Microsoft and Blizzard is small, the popularity of Blizzard’s major games in Korea is not as high as overseas” – despite Overwatch and Starcraft 2 being some of the most popular games in the country at the height of their respective releases.

Still, it now means that the UK are further in the minority with their decision to turn down the deal, with the UK’s CMA now facing an official legal challenge for their decision by Microsoft.

Update 16/5: The CMA has now faced questions from UK MPs, as it’s defended its decision to stand by its ruling not to approve the acquisition of Activision by Microsoft in spite of the European Commission’s ruling yesterday.

As reported by Eurogamer, CMA bosses Marcus Bokkerink and Sarah Cardell took questions from the government’s Business and Trade Committee this morning – with Bokkerink responding “The UK has always encouraged – and it is the CMA’s duty to encourage – open competitive markets. We are vigilant – as it is our duty to be – to investments that consolidate an already entrenched market power.”

Specifically on the European Commission’s ruling, Sarah Cardell added “The Commission agreed the deal would give rise to competition concerns, there’s no difference between the CMA and EC there, but the Commission has however concluded it would be appropriate to accept Microsoft’s remedy. They have their own test to apply and they’ve reached their own view. But we remain of the view, from a UK perspective, that it was not appropriate to accept that remedy.”

Original story follows: In an interesting turn of events, the European Union Commission has approved Microsoft’s proposed takeover of Activision, despite the deal being blocked by the UK Competition & Markets Authority last month.

In the European Commission’s report, the body said that Microsoft commitments “fully address the competition concerns identified by the Commission and represent a significant improvement for cloud gaming as compared to the current situation” – a marked departure from the UK’s claim that the deal could see “reduced innovation and less choice for UK gamers over the years to come” particularly when it came to the cloud gaming sector.

The Commission said their decision came following an in-depth investigation of the deal, which though preliminary findings found it could harm competition, ultimately decided that Microsoft ‘would not be able to harm rival consoles and rival multi-game subscription services’ as a result of the deal. Moreover, it determined that – if Microsoft decided to withdraw Activision games such as Call of Duty from the PlayStation – it “would not significantly harm competition in the consoles market” and the the company would have no incentive to do so anyway.

It did admit that if Microsoft made Activision games exclusive to Game Pass, it would ‘reduce competition’ in the cloud streaming space, but one of Microsoft’s proposed remedies for the deal included a free license to cloud game streaming service providers and to consumers in the EEA to stream all current and future Activision Blizzard PC and console games via any cloud gaming streaming services of their choice.

Unfortunately for Activision and Microsoft, this doesn’t change the current outcome of the ruling in so far as the UK – mainly because, of course, the UK left the EU back in 2020 – but this latest twist could strengthen Microsoft and Activision’s case for their future appeal of the UK’s ruling and potentially cause the UK to reconsider. Following the UK ruling, Microsoft said the decision was “Bad for Britain” and said that the outcome was “discourage innovation and investment in the United Kingdom.”

The UK’s CMA has responded to today’s ruling by the European Commission with a statement of its own. “The UK, US and European competition authorities are unanimous that this merger would harm competition in cloud gaming,” it posted to its Twitter account. “The CMA concluded that cloud gaming needs to continue as a free, competitive market to drive innovation and choice in this rapidly evolving sector. Microsoft’s proposals, accepted by the European Commission today, would allow Microsoft to set the terms and conditions for this market for the next 10 years.”

“They would replace a free, open and competitive market with one subject to ongoing regulation of the games Microsoft sells, the platforms to which it sells them, and the conditions of sale. This is one of the reasons the CMA’s independent panel group rejected Microsoft’s proposals and prevented this deal. While we recognise and respect that the European Commission is entitled to take a different view, the CMA stands by its decision.”

Update 17:30: Activision has now also responded to today’s ruling, with Bobby Kotick sending an employee email which reads “Careful regulators in numerous other countries have already approved the merger. By joining them today, the EC has once again demonstrated their rigorous, fair and sensible approach with the creation of appropriate regulatory guardrails that ensure competition in important growth industries.”

“Microsoft has agreed to conditions as part of the EC’s approval, including licenses for legitimate cloud gaming providers to stream Activision Blizzard games and enforcement mechanisms to ensure these regulatory commitments are upheld. This important step provides a proper roadmap for regulators around the world to consider when determining how best to encourage and promote competition in the gaming industry.”

“There is still work to be accomplished before our merger can be finalized but it is encouraging that regulators like the European Commission understand and appreciate the considerable growth opportunities provided by our industry.”

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