EU Chief Margrethe Vestager spoke about the Microsoft – Activision deal in a recent keynote, calling it a positive development and explaining why they approved it.
Vestager’s speech was at the International Forum of the Studienvereinigung Kartellrecht, simply titled “Recent Developments in EU merger control.”
Before Vestager spoke about the deal, she made a clarification about the work of competition regulators, referring not only to the European Commission, but also the UK’s CMA and the US’ FTC. Vestager addressed the misconception that regulators only work to approve or reject deals for competition concerns.
In fact, the EU has to look into remedies and consider them very seriously. The EU is generally inclined towards accepting remedies, having approved 80 % of their deals because they had remedies.
As Vestager put it, not all competition issues are fixed by divestment, and markets don’t always end up better after such mergers are rejected.
You can read Vestager’s full comments here, but this is what she said in particular about the EU’s decisionmaking on the deal:
“Where we diverged with the CMA was on remedies. We accepted a 10-year free license to consumers to allow them to stream all Activision games for which they have a license via any cloud service. And why did we do this instead of blocking the merger? Well, to us, this solution fully addressed our concerns. And on top of that, it had significant procompetitive effects.
Consider the pre-merger situation, where Activision does not license its games to cloud services. So, in this case, the remedy opens the door for smaller cloud services in the EU to offer big games on their platforms, widening choice for gamers.
The merits of this remedy was recognised across the spectrum – by developers, by cloud gaming providers, by distributors and of course also by consumer groups. And that is because it unlocked the potential of the cloud market.”
Now, the EU’s own explanation of their decision already went over where they diverged from the CMA, but what is interesting here is EU citing the feedback they received.
In their own words, developers, cloud gaming providers, distributors, and consumer groups all talked up the merits of Microsoft’s proposed remedy. That was what led the EU to the conclusion that the deal had “significant procompetitive effects.”
As we now know, the UK and the US are outliers in their rejections of the deal. Microsoft and Activision are poised to finish the deal, and EU’s gamers are set to benefit from their approval immediately, as is most of the rest of the world.
