Microsoft-Activision Deal Gets South African Approval
South Africa’s Competition Commission has unconditionally approved Microsoft’s proposed acquisition of Activision Blizzard. The watchdog stated that the deal is unlikely to result in substantial foreclosure concerns or negatively impact competition in relevant markets. Microsoft’s commitment to continue supplying Call of Duty games to other console manufacturers, such as Sony and Nintendo, has also been considered.
Microsoft’s acquisition of Activision Blizzard has faced scrutiny in various markets since its announcement. Sony, one of the leading competitors in the gaming industry, has expressed strong opposition to the deal, alleging that Microsoft aims to foreclose Sony out of Activision Blizzard IPs, such as Call of Duty.
As one of the largest markets in Africa, South Africa’s Competition Commission has been reviewing the anticompetitive potential of the deal. The Commission approved the transaction in a meeting held on April 11th, which was made public today.
The Commission rejected Sony’s allegation that Microsoft intends to foreclose it out of Activision Blizzard’s business, stating that Microsoft does not have the ability nor the incentive to undercut competitors through foreclosing strategies with Call of Duty. The regulator also highlighted Microsoft’s commitments to continue supplying Call of Duty games to competitors. If you would like to review to complete document, check here.
This approval follows similar green lights from Saudi Arabia, Brazil, Serbia, Chile, and Japan regulators. Meanwhile, the UK’s Competition and Markets Authority (CMA) is set to rule on the acquisition by April 26, and the European Commission will announce its decision by May 22. Although the CMA has expressed some concerns regarding the deal’s impact on the cloud gaming market, it no longer believes the acquisition will significantly reduce competition in the console gaming space.
Reports suggest that Microsoft’s willingness to offer game licensing deals to rivals will likely address EU antitrust concerns. However, the Federal Trade Commission is suing Microsoft to block the Activision Blizzard deal over antitrust concerns in the US.