European Commission: CMA exaggerates Microsoft's position in cloud gaming

The European Commission approved Microsoft's acquisition of Activision Blizzard, a decision that was a breath of fresh air for the American company in its attempt to close the biggest deal in the history of video games. Since the conclusion of the European regulator became official, its UK counterpart has criticized the decision, but there is now a response that hits the mark.

EUROPE CONSIDERS CMA EXAGGERATED WITH ITS VIEW OF CLOUD GAMING

The European regulator's approval of the purchase of Activision did not sit well with the UK Competition and Markets Authority (CMA), which insists on blocking and classifying the deal as harmful to the industry and companies involved. However, while the British regulator relied on the emerging cloud gaming sector to argue against the deal, the European Commission accepted Microsoft's remedies to ensure that the purchase does not affect this young market.

EU regulators have cleared Microsoft’s $75bn acquisition of Activision Blizzard, breaking from the UK and US, which are holding up the gaming industry’s biggest dealhttps://t.co/wWCnaD4C5A

— Financial Times (@FinancialTimes) May 16, 2023

Precisely, an official from the commission responded to the CMA (via The Financial Times) by stating that the British regulator "exaggerated" Microsoft's alleged dominant position in cloud gaming. Specifically, the CMA claimed that the American company had 60% - 70% of this sector, but considered that all Xbox Game Pass subscribers play in the cloud, something that has not been defined in detail and supported by data.

Taking this into account, the European Union decided that the remedies and guarantees should be applied thinking about the PC gaming, services, and cloud sectors to prevent Microsoft from having a dominant position, and some think that the CMA should have done the same instead of simply opposing it. After the CMA's block, Xbox head Phil Spencer said the British regulator relied on a market that isn't even defined.

Thus, the approval of the purchase of Activision in European territory has been a triumph for Microsoft, which strengthens its position to face the CMA and the FTC of the United States in the coming weeks.