Last October, it looked like disaster for Microsoft when the European Union initiated an in-depth inquiry into its acquisition of Activision, but it now seems that Microsoft will emerge victorious. Three sources familiar with the European Commission’s position on the topic told Reuters that Microsoft will likely receive EU antitrust approval on April 25 if it agrees to make a few additional concessions.
According to Reuters, the European Commission is unlikely to require Microsoft to offload substantial portions of Activision, such as its Call of Duty division, in order to gain clearance. One insider told Reuters that long-term licence agreements for lucrative titles that Microsoft has provided to competitors could suffice, in addition to agreeing to “additional behavioural solutions to appease the concerns of parties other than Sony.”
Microsoft refused Ars’ request to comment, but the company told Reuters that it is “committed to developing effective and easily enforceable solutions that satisfy the European Commission’s concerns.” Microsoft has rejected in the past any proposed remedies requiring the amalgamated firms to sell the Call of Duty franchise.
The United Kingdom indicated earlier this month that its antitrust approval of the deal could be contingent on such a sale. A spokeswoman for Activision told Ars at the time that the company aimed to assist the UK government in “better understanding our sector” to prevent the sale of Call of Duty or the division of Activision’s business.
Last week, Microsoft attended a secret hearing with the UK’s antitrust agency, the Competition and Markets Authority (CMA), to explore “feasible remedies,” as reported by Bloomberg. Reports added that Microsoft offered to pay a third-party monitor to oversee the company’s compliance with any behavioural remedies provided by the UK to ratify the contract. The CMA is anticipated to issue its verdict on April 26.
Bloomberg stated that this hearing followed a closed-door discussion with the EU in which Microsoft President Brad Smith claimed that the merger would not be “possible or realistic” without the inclusion of Call of Duty.
If the European Commission accepts the acquisition based mostly on Microsoft’s proposal to give long-term licence deals to competitors, the commission’s decision could influence other government bodies evaluating the deal.
A Microsoft representative told Reuters, “Our pledge to offer long-term, 100 percent equitable access to Call of Duty to Sony, Steam, Nvidia, and others preserves the deal’s benefits for gamers and developers and encourages market competition.”
The UK isn’t the only body not yet convinced by Microsoft’s suggested solution that licence deals will remedy anticompetitive problems. The director of the United States Federal Trade Commission’s Bureau of Competition, Holly Vedova, cautioned that Microsoft cannot always be relied upon to share its most lucrative titles with competitors when the FTC attempted to reject the purchase last December. Vedova said in an FTC complaint, “Microsoft has already demonstrated that it can and will restrict material from its gaming competitors.”
A representative for Activision told Ars that the acquisition would enable the business to continue producing multi-platform games that can compete in a “market dominated by expanding competitors.” The representative for Activision also stated that Microsoft’s proposed fixes “are legally enforceable, and our devoted player community will hold Microsoft accountable for upholding its promises.”