UK Regulator Gives Provisional Approval to Revised Microsoft Deal

Microsoft has finally got the CMA's approval.

The tech giant has recently acquired a "provisional aprroval" from the UK's competition regulator, the Competition Markets Authority (CMA), placing Microsoft one step closer to acquiring Activision Blizzard.

Microsoft previously submitted a revision of its acquisition deal with Activision Blizzard to the CMA to get its approval in late August.

The CMA's Provisional Conclusion

In its latest announcement, the CMA revealed that it found Microsoft's revised acquisition deal with Activision Blizzard acceptable as it addressed the regulator's concerns in its first submission.

You may recall that the CMA forbid Microsoft from pursuing its acquisition of Activision Blizzard in late April due to the problematic solutions the tech giant provided.

Back then, Microsoft's solutions had significant shortcomings and would require mandatory oversight from the watchdog itself. The CMA also added that Microsoft's acquisition deal with Activision Blizzard would reinforce Microsoft's advantage in the market by giving it control over important gaming content, namely in cloud gaming.

To resolve the impasse, Microsoft restructured its deal with Activision to transfer cloud gaming rights for all current and new Activision Blizzard PC and console games released over the next 15 years to Ubisoft in perpetuity. As a result, Microsoft will never be in a position to either release Activision Blizzard games exclusively on its Xbox Cloud Gaming service or exclusively control the licensing terms of Activision Blizzard games for rival services.

The CMA found this solution acceptable as it would prevent Microsoft from limiting access to Activision's key content to its own cloud gaming service or withholding them from its rivals. It would also let Ubisoft offer Activision's games directly to consumers and all cloud gaming service providers however it chooses.

As such, Ubisoft can offer Activision games via buy-to-play or multigame subscription services, or any new model for providing content that might emerge as the market develops.

Wait - There's More

While the CMA found Microsoft's solution acceptable, it has only given its provisional approval to the company to acquire Activision. The UK regulator said it still has "limited residual concerns" that certain provisions in the sale of Activision's cloud streaming rights to Ubisoft could allow Microsoft to circumvent, terminate, or not enforce it.

As such, the tech giant couldn't go ahead with its acquisition deal just yet. However, Microsoft only needs to wait for the CMA's final decision on the matter, which it could acquire after the UK regulator is done consulting on its remedies.

The CMA is expected to end its consultations on Oct.6.

Despite the CMA's limited residual concerns, Microsoft welcomed the regulator's provisional conclusion with open arms. Microsoft vice chair and president Brad Smith, in an X.com post, said that the CMA's announcement "encouraged" the company.

"We presented solutions that we believe fully address the CMA's remaining concerns related to cloud game streaming, and we will continue to work toward earning approval to close before the 18th October deadline," Brad said.

Activision also welcomed the CMA's provisional approval of the acquisition deal, describing it in a statement to employees as "a significant milestone for the merger and a testament to our solutions-oriented work with regulators," per The Verge.