After Microsoft pledged to let its competitors in the cloud gaming industry provide blockbuster titles such as Call of Duty on their own platforms for a period of ten years, the European Commission stated that its own analysis indicated the pact wouldn’t damage competition.
The clearance means that the fate of the merger now depends on whether or not the company can win legal challenges in the United States and the United Kingdom, which is expected to be a difficult effort.
The head of antitrust enforcement for the European Union, Margrethe Vestager, referred to the agreement as “pro-competitive” and predicted that it will “kickstart” the cloud streaming industry on Monday. The cloud streaming market accounts for only 1% to 3% of the overall gaming market.
The approval of the contract by the European Union goes against the decisions made by the Competition and Markets Authority of the United Kingdom, which demonstrated its post-Brexit emergence as a global watchdog just last month, and the Federal Trade Commission of the United States, which attempted to prevent the deal just a year ago.
According to Margrethe Vestager, the EU’s Competition Commissioner, the EU and UK regulators came to different findings regarding the rate at which the cloud gaming market would develop in the future.
“We agree that the cloud streaming market is a promising market. We may disagree about the speed at which it will develop,” Vestager acknowledged this, adding that the EU anticipates a long period of development time for online gaming in the cloud than the UK does.
Jennifer Rie, an analyst at Bloomberg Intelligence, stated that despite the fact that the judgment made by the EU provides Microsoft with a ray of light, “it probably doesn’t change much” in terms of the company’s chances of success in its legal challenges to the FTC and CMA.
The European Commission justified its findings by stating that the pledges will make it possible for millions of users in Europe “to stream Activision’s games using any cloud gaming services” that are currently active in the EU zone.
The commission “conducted an extremely thorough, deliberate process to gain a comprehensive understanding of gaming,” Bobby Kotick, chief executive officer of Activision, commented on the matter. “As a result, they approved our merger with Microsoft, although they required stringent remedies to ensure robust competition in our rapidly growing industry.”
In contrast, the CMA stated that the purchase will strengthen Microsoft’s dominance in the cloud gaming market by giving the company ownership over a number of industry-leading titles such as World of Warcraft and Overwatch.
According to the findings of the UK regulator, Activision would be able to begin offering games on cloud platforms in the future even if the merger were not to take place.
“Microsoft’s proposals, accepted by the commission today, would allow Microsoft to set the terms and conditions for this market for the next 10 years,” Sarah Cardell, who is in charge of the CMA, is quoted as saying. “While we recognize and respect that the European Commission is entitled to take a different view, the CMA stands by its decision.”