Microsoft Is Expected To Soon Offer Concessions To EU In The Activision Deal

According to a Reuters report citing people familiar with the matter, Microsoft is likely to offer remedies to EU antitrust regulators in the coming weeks in order to avoid formal objections to its $69 billion bid for “Call of Duty” maker Activision Blizzard.

The deal was announced in January by the US software giant and Xbox maker to help it compete with leaders Tencent and Sony.

It has since faced regulatory challenges in the European Union, the United Kingdom, and the United States, with Sony criticizing the deal and even requesting a regulatory veto.

The cutoff date for the European Commission, which is probing the transaction, to submit a formal list of competition concerns known as a statement of objection is fast approaching and is slated for January next year.

Offering solutions prior to the issuance of such a document may shorten the regulatory process.

“Ultimately, such a move could secure an early clearance with the European Commission and subsequently be used by the parties before other antitrust agencies,” said Stephane Dionnet, a partner at law firm McDermott Will & Emery.

“However, it remains to be seen whether the active complainants will validate such concessions (in particular in terms of scope) and if behavioural remedies will also be accepted by the CMA and the FTC,” he said, referring to the UK and U.S. antitrust agencies.

According to another person with direct knowledge, Microsoft’s solution would primarily consist of a 10-year licensing agreement with Playstation owner Sony.

Following the publication of the Reuters story, Activision’s stock rose 2%.

The EU competition authority, which is expected to rule on the deal by April 11, and Sony both declined to comment.

Microsoft stated that it was collaborating with the Commission to address legitimate market concerns.

“Sony, as the industry leader, says it is worried about Call of Duty, but we’ve said we are committed to making the same game available on the same day on both Xbox and PlayStation. We want people to have more access to games, not less,” a Microsoft spokesperson said.

Brazil, Saudi Arabia, and Serbia have all given their unconditional approval to the deal.

(Adapted from Reuters.com)

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