The UK’s competition regulator, the Competition and Markets Authority (CMA), has issued a statement expressing satisfaction with Microsoft’s adjusted plans to sell Activision’s cloud streaming rights to Ubisoft, stating that it “substantially addresses most concerns” related to the proposed Microsoft-Activision acquisition.
Back in April, the CMA had halted the acquisition, citing worries that it could have adverse effects on competition in the UK’s cloud gaming sector. In response, Microsoft recently announced that, should the merger proceed, it would transfer “the cloud streaming rights for all current and new Activision Blizzard PC and console games released over the next 15 years to Ubisoft Entertainment SA.” This announcement has garnered a favorable response from the CMA.
While the CMA acknowledges that the new proposal “makes important changes that substantially address the concerns it set out in relation to the original transaction,” it also points out “limited residual concerns that certain provisions in the sale of Activision’s cloud streaming rights to Ubisoft could be circumvented, terminated, or not enforced.”
To mitigate these concerns, Microsoft has offered remedies to ensure the enforceability of the terms of the sale of Activision’s rights to Ubisoft, according to the regulator. The CMA has provisionally concluded that these additional protections should resolve the remaining concerns.
Colin Raftery, the CMA’s Senior Director of Mergers and Phase One Decision Maker, commented on the development, saying, “This is a new and substantially different deal, which keeps the cloud distribution of these important games in the hands of a strong independent supplier, Ubisoft, rather than under the control of Microsoft.” He added, “With additional protections to make sure that the deal is properly implemented, this will maintain the structure of the market, enabling open competition to continue to shape the development of cloud gaming in the years to come, and giving UK gamers the opportunity to access Activision’s games in many different ways, including through cloud-based multigame subscription services.”
The CMA has opened a consultation for the updated proposal, which will remain open until October 6. The deadline for the merger agreement, previously extended, is set for October 18.
