Tech

Competition watchdog to reopen talks with Microsoft over Activision Blizzard merger

The UK competition watchdog is ready to reopen talks with Microsoft after the company agreed to halt legal proceedings over its planned merger with Activision Blizzard.

The technology giant will attempt to restructure the $69bn (£56bn) deal to respond to the Competition and Markets Authority’s concerns after a breakthrough in the United States.

A US judge ruled on Tuesday that Microsoft could go ahead with its acquisition of the video game maker behind Call of Duty.

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The competition watchdog in April told Sky News about the decision to prevent the deal between Microsoft and Activision Blizzard.

The American competition regulator, the Federal Trade Commission (FTC), had originally asked the judge to stop the proposed deal on the basis it would give Microsoft, which makes the Xbox gaming console, exclusive access to Activision games before they are available on other platforms.

Judge Jacqueline Scott Corley turned down the FTC’s bid because it had not successfully shown that the combined firm is likely to pull Call of Duty from Sony PlayStation or “substantially lessen competition” in the relevant gaming markets.

Judge Corley wrote in her ruling, which was delivered after a week-long hearing in San Francisco: “The FTC has not shown it is likely to succeed on its assertion the combined firm will probably pull Call of Duty from Sony PlayStation, or that its ownership of Activision content will substantially lessen competition in the video game library subscription and cloud gaming markets.”

The decision clears a significant hurdle for the two companies, which are battling regulators in the US and UK.

In April, the UK’s regulator said it was concerned about stifling competition in the market, with Microsoft announcing plans to appeal the decision.

The merger was approved by the European Union the following month.

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European regulators said they accept commitments made by Microsoft that its offer to take over the developer would not lessen competition in the gaming sector.

After approving the merger, 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,” she added.

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