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European Union approves $75 billion Microsoft acquisition of Activision Blizzard

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Microsoft has received approval from the European Union's antitrust watchdog for its planned $75 billion acquisition of Activision Blizzard.

This approval comes after the deal faced regulatory challenges in the UK.

The European Commission cleared the deal based on commitments by Microsoft to make Activision's games, including the popular Call of Duty franchise, available on rival cloud-streaming platforms.

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However, the companies still require approval from other major competition authorities to complete the transaction.

While the EU approval is a positive step, Microsoft still faces obstacles.

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The UK's Competition and Markets Authority rejected the merger, citing concerns about competition in the country's games market.

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Microsoft plans to appeal the decision but faces slim odds of success.

The US Federal Trade Commission has also sued Microsoft to block the deal and has scheduled a hearing for August.

Despite these challenges, Microsoft has cleared one of its major regulatory hurdles.

Microsoft President and Vice Chair Brad Smith highlighted that the commitments made by Microsoft would apply globally, enabling millions of consumers to play Activision games on any device.

Activision welcomed the EU's approval, referring to it as a "firm but pragmatic approach to gaming."

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The divergent decisions of the EU and the UK could create confusion regarding the regulatory approaches to large-scale mergers and acquisitions.

Previously, UK antitrust regulators played a limited role in such deals, but since the country's separation from the EU, London has become a significant global regulator in this area.

The EU approval could aid Microsoft in presenting the UK decision as an outlier during the appeal process.

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However, legal experts raise questions about Microsoft's ability to effectively carve out the UK market, given the practical and legal challenges involved.

The UK is the sixth-largest videogame software market globally.

The EU approval may also influence Microsoft's arguments before the US FTC's administrative law judge and potentially affect decisions by other regulators, such as Australia and New Zealand, which have not yet announced their positions on the deal.

While the EU decision could carry some weight, particularly if multiple jurisdictions align, experts differ on its potential impact on the FTC's position.

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Some believe that foreign authority decisions would not significantly influence the FTC's stance.

The European Commission's decision concluded the deal would not harm Microsoft's competitors in console games and multigame subscription services.

However, it expressed concerns about potential competition issues in cloud gaming and noted that the merger would strengthen Microsoft's position in computer games.

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