EU approves £55bn tie-up between Microsoft and Activision Blizzard

One of the biggest takeover deals in the gaming industry has been approved by European regulators weeks after being blocked by the UK’s Competition and Markets Authority.

The European Commission said that it had approved Microsoft’s 68.7 billion dollar (£55 billion) deal to take over Activision Blizzard, the company behind Call Of Duty and other games.

Regulators in Brussels said they had accepted commitments offered by Microsoft to ensure that the deal does not lessen competition.

“The commitments fully address the competition concerns identified by the Commission and represent a significant improvement for cloud gaming as compared to the current situation,” the Commission said in a statement.

But this had not been enough for the UK’s Competition and Markets Authority, which on Monday said that it “stands by” last month’s decision to block the deal.

“Microsoft’s proposals, accepted by the European Commission today, would allow Microsoft to set the terms and conditions for this market for the next 10 years,” said CMA chief executive Sarah Cardell.

“While we recognise and respect that the European Commission is entitled to take a different view, the CMA stands by its decision.”

Microsoft, which makes the Xbox console, already accounts for between 60% and 70% of cloud gaming services where people play online without needing to download a game.

Despite the EU approval, the companies would still need UK approval if they want to operate in this country. In the past big deals like this would be decided at EU level, with the UK only dealing with smaller issues.

On Monday, the Prime Minister’s official spokesperson said that being outside the EU “does allow us to take a different approach”.

However he also had to defend the UK as a “tech-friendly country” after heavy criticism from Microsoft.

Last month, Microsoft president Brad Smith said that the UK was a worse place to do business than the EU. He warned that the “English Channel has never seemed wider”, in an interview with the BBC.

“There’s a clear message here. The European Union is a more attractive place to start a business if you want some day to sell it than the United Kingdom,” he said.

On Monday, EU competition commissioner Margrethe Vestager said: “Video games attract billions of users all over the world. In such a fast-growing and dynamic industry, it is crucial to protect competition and innovation.

“Our decision represents an important step in this direction, by bringing Activision’s popular games to many more devices and consumers than before thanks to cloud game streaming.

“The commitments offered by Microsoft will enable for the first time the streaming of such games in any cloud game streaming services, enhancing competition and opportunities for growth.