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Microsoft Wins EU Antitrust Approval for Activision Deal Vetoed by UK

The Activision Blizzard Booth is shown on June 13, 2013, during the Electronic Entertainment Expo in Los Angeles. (AP)
The Activision Blizzard Booth is shown on June 13, 2013, during the Electronic Entertainment Expo in Los Angeles. (AP)
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Microsoft Wins EU Antitrust Approval for Activision Deal Vetoed by UK

The Activision Blizzard Booth is shown on June 13, 2013, during the Electronic Entertainment Expo in Los Angeles. (AP)
The Activision Blizzard Booth is shown on June 13, 2013, during the Electronic Entertainment Expo in Los Angeles. (AP)

Microsoft Corp gained EU antitrust approval for its $69 billion acquisition of Activision on Monday, in a significant boost that could prompt Chinese and Korean regulators to follow suit despite a British veto of the deal.

The US software giant still faces a battle to clinch a deal. It has until May 24 to appeal a decision by Britain's Competition & Markets Authority (CMA) to block it. A final decision may take months. The US Federal Trade Commission's case against the deal is also pending at the agency.

The European Commission said that the biggest-ever deal in gaming was pro-competitive due to Microsoft's licensing deals, confirming a Reuters report in March.

Such licenses are "practical and effective", European Union antitrust chief Margrethe Vestager told reporters.

"Actually, they significantly improve the condition for cloud game streaming compared to the present situation, which is why we actually consider them pro-competitive," she added.

The EU watchdog said Microsoft has offered 10-year free licensing deals to European consumers and cloud game streaming services for Activision's PC and console games.

Microsoft has in recent months signed such deals with Nvidia, Nintendo, Ukraine's Boosteroid and Japan's Ubitus to bring Activision's Call of Duty to their gaming platforms should the deal go through.

"The European Commission has required Microsoft to license popular Activision Blizzard games automatically to competing cloud gaming services. This will apply globally and will empower millions of consumers worldwide to play these games on any device they choose," said Microsoft President Brad Smith.

Vestager said the Commission has a different assessment of how the cloud gaming market will grow in contrast with the UK.

"They see this market developing faster than we would think," she said. "There is a bit of a paradox here, because we think that the remedies that we have taken and will allow for licensing to many, many more in the cloud gaming markets."

The UK Competition and Markets Authority said it stood by its veto. Microsoft will appeal to the Competition Appeal Tribunal, with a decision expected to take months.

The other remaining big hurdle is the US Federal Trade Commission which is seeking to block it. Japan approved the takeover in March.

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Microsoft Pledges to Protect European Operations, Unveils Data Center Expansion

A Microsoft logo is pictured on a store in the Manhattan borough of New York City, New York, US, January 25, 2021. (Reuters)
A Microsoft logo is pictured on a store in the Manhattan borough of New York City, New York, US, January 25, 2021. (Reuters)
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Microsoft Pledges to Protect European Operations, Unveils Data Center Expansion

A Microsoft logo is pictured on a store in the Manhattan borough of New York City, New York, US, January 25, 2021. (Reuters)
A Microsoft logo is pictured on a store in the Manhattan borough of New York City, New York, US, January 25, 2021. (Reuters)

Microsoft pledged Wednesday to fight any US government order to halt data center operations in Europe as it sought to soothe concerns among European customers that trans-Atlantic tensions would lead to service disruptions.

The company's president, Brad Smith, said it's not something that officials are talking about in Washington, D.C. but it is a “real concern” for Microsoft's customers across Europe, which include governments.

President Donald Trump has stoked tensions between the US and Europe with his tariff-fueled trade war, and alarmed European leaders with policy changes, including pausing intelligence sharing with Ukraine, that throw into doubt his administration's commitment to the trans-Atlantic relationship, The AP news reported.

Smith, speaking at an event in Brussels, tried to allay concerns as he announced that the company was expanding data center operations across Europe.

“What we want Europeans to know is that they can count on us,” he said in a speech.

“In the unlikely event we are ever ordered by any government anywhere in the world to suspend or cease cloud operations in Europe, we are committing that Microsoft will promptly and vigorously contest such a measure using all legal avenues available, including by pursuing litigation in court,” Smith wrote in a Wednesday blog post.

He noted that Microsoft has experience fighting lawsuits from the previous Trump administration as well as from former President Barack Obama’s administration.

“If we ever find ourselves losing we will put in place business continuity arrangements” that include storing computer code in Switzerland that European partners can access, he said.

Microsoft is making five digital commitments to Europe, including increasing its data center capacity by 40 in 16 countries over the next two years, Smith said. The expansion will cost tens of billions of dollars annually. Smith declined to be more specific about the cost when asked by reporters.

The expansion comes amid calls for Europe to assert tech and data sovereignty by weaning itself off reliance from big US cloud data service providers, including Microsoft, Amazon and, to a lesser extent, Google.

“Given recent geopolitical volatility, we recognize that European governments likely will consider additional options,” and Microsoft is committed to collaborating with European companies, Smith said.