Competition watchdog gives provisional approval for Microsoft to buy Activision

A nearly half-year battle between the UK’s competition regulator and Microsoft appeared to have ended on Friday as the US tech giant won provisional approval for its 69 billion US dollar (£54 billion) takeover of Activision Blizzard.

The Competition and Markets Authority (CMA) said it had provisionally cleared the deal after Microsoft came back with a new proposal.

The new deal will see rival games developer Ubisoft take over the rights to Activision’s cloud gaming rights.

The CMA had been worried that if Microsoft – which is also strong in cloud gaming – got hold of these, it could use its strength to stifle competition.

But by selling the cloud gaming rights for titles including Call Of Duty, Overwatch and World Of Warcraft, it establishes Ubisoft “as a key supplier of content to cloud gaming services, replicating the role that Activision would have played in the market as an independent player”, the watchdog said.

The CMA originally blocked the Microsoft deal in the spring, and at one point the case looked like it could end up in the courts.

But abruptly, last month Microsoft abandoned its appeals plans and proposed a new solution which it hoped would win approval from the watchdog.

CMA chief executive Sarah Cardell said that if Microsoft had proposed this solution to begin with it would have saved the tech giant a lot of time.

“It would have been far better, though, if Microsoft had put forward this restructure during our original investigation,” she said.

“This case illustrates the costs, uncertainty and delay that parties can incur if a credible and effective remedy option exists but is not put on the table at the right time.”

Microsoft vice chairman and president Brad Smith said: “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.”

This seems to mark an end to the CMA’s biggest fight since gaining expanded powers after Brexit.

When the UK was still part of the EU such large deals would be investigated in Brussels, where regulators have separately approved the Microsoft and Activision tie-up.