The European Commission has officially approved the Microsoft-Activision merger under specific conditions, and now the CMA weighs in with their own response.
The Microsoft-Activision merger has been cleared in as many as 10 jurisdictions, and today's greenlight from the European Commission carries significant weight. Not all regulators agree that the merger is pro-competition, with the FTC in the U.S. and Competition and Markets Authority (CMA) in the UK choosing to block the merger.
The differences between the European Commission and CMA are particularly interesting given the UK was once part of the EU, and now the CMA has also issued its own statement on the European Commission's merger approval. The CMA essentially believes the approval will allow Microsoft to control a key part of the cloud segment's growth via the sheer power of Activision-Blizzard titles.
Here's what the CMA said about the EC's merger approval:
"The UK, US and European competition authorities are unanimous that this merger would harm competition in cloud gaming.
"The CMA concluded that cloud gaming needs to continue as a free, competitive market to drive innovation and choice in this rapidly evolving sector.
"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.
"They would replace a free, open and competitive market with one subject to ongoing regulation of the games Microsoft sells, the platforms to which it sells them, and the conditions of sale.
"This is one of the reasons the CMA's independent panel group rejected Microsoft's proposals and prevented this deal.
"While we recognise and respect that the European Commission is entitled to take a different view, the CMA stands by its decision."
The terms and conditions that Microsoft set in regards to cloud gaming have been favored by streaming providers, which is rightly so given that some cloud competitors like NVIDIA and Boosteroid have signed deals with Microsoft. While we don't know the full extent of the commitments that Microsoft proposed to the Commission, the CMA had published a redacted copy of Microsoft's original Cloud Remedy document in its final report.
Microsoft and Activision-Blizzard are currently appealing the CMA's decision, and have hired some of the best appeals lawyers in the UK for their case.