U.K. signals approval for Microsoft-Activision deal, clearing final hurdle
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U.K. regulators at the Competition and Markets Authority say that Microsoft's revised plan to purchase Activision Blizzard largely satisfies objections that earlier this year had compelled it to globally block what would have been the largest deal in Microsoft's history.
Why it matters: U.K. regulators' objections were the last significant obstacle ahead of a recently extended Oct. 18 deadline to close the deal.
- Issues raised by the Federal Trade Commission, which sued to block the deal, are unresolved, but would not bar an October closing.
What they're saying: "The CMA considers that the restructured deal makes important changes that substantially address the concerns it set out in relation to the original transaction earlier this year," the U.K. regulator said in a statement Friday morning.
Between the lines: In August, Microsoft said it was changing its $69 billion bid for the Call of Duty maker by offering to sell cloud-streaming rights to Activision Blizzard's current games — and those to be released over the next 15 years — to French mega-publisher Ubisoft.
- That move would mean that Microsoft no longer had control of which services in the nascent cloud gaming market would be allowed to run Activision Blizzard's most popular games.
That change appears to have won over U.K. authorities.
- Friday, the CMA said that while it "has identified limited residual concerns with the new deal, Microsoft has put forward remedies which the CMA has provisionally concluded should address these issues."
- The new deal, the CMA said, also ensures that Microsoft doesn't have undue power over the underlying operating system used to run Activision Blizzard's games in the cloud.
- The agency said it "requires Microsoft to port Activision games to operating systems other than Windows and support game emulators when requested, addressing the other main shortcoming with the previous remedies package."
What they're saying: "We are encouraged by this positive development in the CMA's review process. We presented solutions that we believe fully address the CMA's remaining concerns related to cloud game streaming, and we will continue to work toward earning approval to close prior to the October 18 deadline," Microsoft president Brad Smith said in a statement.
What's next: The CMA is soliciting outside feedback about its provisional approval through Oct. 6.
- The FTC failed to win a preliminary injunction against the deal this past summer.
- The agency has appealed that decision, but it is running out of time to derail the deal before Microsoft and Activision can close it.
