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The UK’s competition watchdog has cleared Microsoft’s $69bn (£54bn) deal to buy Activision Blizzard, the maker of games including Call of Duty and World of Warcraft, in a move that paves the way for both companies to complete the transaction.
The Competition and Markets Authority (CMA) moved to block the megadeal in April, citing concerns that Microsoft – the maker of the Xbox gaming console – would dominate the nascent cloud gaming market.
However, last month the watchdog said a revised deal that included selling cloud gaming rights outside Europe to Activision Blizzard’s French rival Ubisoft had addressed its concerns, indicating the tie-up would be approved.
Sarah Cardell, the CMA’s chief executive, said on Friday that the competition regulator had ensured that Microsoft could not have a “stranglehold” over cloud gaming, which allows users to stream video games stored on remote servers on to their devices.
“As cloud gaming grows, this intervention will ensure people get more competitive prices, better services and more choice,” Cardell said.
The acquisition agreement with Activision Blizzard had been due to expire on 18 October.
Activision Blizzard’s chief executive, Bobby Kotick, said in a note to staff that the company was ready to finalise the transaction.
“We now have all regulatory approvals necessary to close and we look forward to bringing joy and connection to even more players around the world,” he wrote.
The UK regulator had appeared increasingly isolated in its position blocking the takeover after its EU counterparts passed the deal – when Microsoft offered alternative concessions on cloud gaming rights – and the US competition regulator failed to secure a court injunction to stop it.
The Federal Trade Commission is maintaining its opposition to the deal but it cannot prevent Microsoft and Activision from completing it.
The CMA, having been accused by Microsoft and Activision Blizzard of being anti-business with its original decision to block the deal, also turned on Microsoft in its statement.
Cardell said Microsoft had initially persisted with a deal structure that would not work, before amending its proposal.
“Businesses and their advisers should be in no doubt that the tactics employed by Microsoft are no way to engage with the CMA,” she said. “Microsoft had the chance to restructure during our initial investigation but instead continued to insist on a package of measures that we told them simply wouldn’t work.”