Microsoft’s Approach to Regulatory Decision Making on Activision Blizzard Takeover

Activision Blizzard
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In a recent exclusive interview, Microsoft’s vice-chairman and president, Brad Smith, discussed the company’s fresh bid to acquire Activision Blizzard and the role of regulators in making decisions. Smith emphasized Microsoft’s efforts to address regulatory concerns, particularly those of the U.K., and highlighted the need for regulators to determine the future path of the proposed takeover.

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Microsoft’s Consideration of Regulators’ Concerns

Brad Smith emphasized Microsoft’s commitment to addressing the concerns of U.K. regulators before proceeding with its new bid for the takeover of Activision Blizzard. He mentioned that the company had actively taken these concerns to heart, indicating a proactive approach to regulatory considerations.

The Role of Regulators in Decision Making

According to Smith, the ultimate decision lies in the hands of regulators. He stressed the importance of allowing regulators to express their viewpoints and decisions regarding the proposed takeover. This underscores Microsoft’s respect for the regulatory process and its willingness to abide by the outcomes determined by the authorities.

Microsoft’s Revised Proposal and Investigation

Microsoft’s renewed proposal for the takeover of Activision Blizzard was submitted to U.K. regulators after the initial bid was rejected. A new, restructured agreement between Microsoft and Activision was established. The U.K.’s Competition and Markets Authority (CMA) is now tasked with investigating this proposal, with a decision deadline set for October 18.

Previous Regulatory Actions and Concerns

The initial $69 billion offer by Microsoft to acquire Activision Blizzard was blocked by British regulators in April due to concerns related to anti-competitive practices in the emerging cloud gaming market. Regulators feared that Microsoft might limit access to Activision’s games, particularly popular ones like Call of Duty, making them exclusive to Xbox and other Microsoft platforms.

Legal Battles and Approvals

While U.S. regulators attempted to halt the takeover through legal proceedings, a federal judge ruled in favor of Microsoft and Activision Blizzard, allowing the deal to proceed in the U.S.

On the other hand, EU regulators approved the takeover in May after Microsoft offered remedies to address competition concerns, including granting royalty-free licenses for cloud gaming platforms.

Microsoft’s Approach to Regulatory Concerns

Brad Smith clarified that Microsoft did not dismiss, downplay, or ignore the regulatory concerns surrounding the proposed takeover. Instead, the company worked to address these concerns comprehensively. By doing so, Microsoft aimed to strike a balance between advancing healthy competition and addressing anti-competitive worries.

The Future Path Determined by Regulators

Smith reiterated that the decision about the viability of the proposed takeover rests with regulators, particularly those in the U.K. He emphasized that it is the regulators who will ultimately decide whether the path for the takeover is clear and aligned with regulatory standards.

Changes in the New Deal

The Competition and Markets Authority disclosed that, under the new deal, Microsoft would not acquire cloud rights for existing Activision PC and console games, as well as for new games released by Activision for the next 15 years.

Instead, French gaming publisher Ubisoft would assume these rights before Microsoft’s acquisition of Activision.

Collaboration for Innovation and Regulatory Compliance

Brad Smith concluded by highlighting the potential for companies to collaborate in advancing innovation while simultaneously addressing regulatory concerns. He mentioned that in the realm of technology, collaborative steps could be taken to ensure both innovation and regulatory compliance.

“That to me, is not just a recipe for this transaction,” said Smith.

“I think that in the world of technology, whether we’re talking about software or hardware or pharmaceuticals, there are times when companies can come together in advance innovation, produce better products, and there may be steps that need to be taken at the same time to address regulatory concerns.”

Dedication in Proactive Approach

Microsoft’s approach to the proposed takeover of Activision Blizzard underscores its commitment to addressing regulatory concerns, collaborating with regulators, and respecting the decision-making process.

The company’s proactive stance in considering regulatory worries and its willingness to adapt its proposal reflect its dedication to both competition and compliance.