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Microsoft in showdown with EU to save $69 billion deal

Microsoft Corp. headed into a showdown with European Union antitrust watchdogs by insisting its $69 billion takeover of Activision Blizzard Inc. will “bring more competition” for gamers but pledging to show willingness to address antitrust concerns.

“I think we’ll make clear that our acquisition of Activision Blizzard will bring more games to more people on more devices and platforms than ever before,” Microsoft President Brad Smith told reporters ahead a closed-door hearing in Brussels.

“We’re more than willing, given our strategy, to address the concerns that others have, whether it’s by contracts, like we did with Nintendo this morning, or whether it’s by regulatory undertakings, as we’ve consistently been open to addressing,” Smith said.

He was referring to the signing of a 10-year agreement with Nintendo that “will bring to Nintendo devices.” Microsoft last year already publicly offered to give other rival Sony Group Corp. a similar license for the blockbuster game.

Microsoft’s proposed Activision Blizzard deal is the company’s largest ever and one of the 30 biggest acquisitions of all time. Aside from the transaction would give Microsoft some of the most popular video game franchises, such as . The Xbox maker already owns the franchise and virtual-world-building game.

The EU hearing — which includes Activision Chief Executive Officer Bobby Kotick as well as about 100 lawyers, officials and critics Sony, Alphabet Inc. and Nvidia Corp. attending in person and online — follows provisional UK findings that the deal could substantially harm competition in gaming consoles and cloud gaming services. That’s raised questions about the viability of the transaction also under attack in the US over fears Microsoft could make it harder for rival platforms to access Activision’s most popular titles.

Microsoft’s Activision Deal Hinges on Blockbuster Call of Duty
Microsoft recently received the EU regulators’ initial findings in a so-called statement of objections, laying out the bloc’s key concerns about the deal, according to people familiar with the review.

In the UK it’s clear already that licensing alone won’t be enough to convince its watchdog. The Competition and Markets Authority this month suggested a number of structural remedies that include the divestiture of the business associated with the Activision part of the business or blocking the merger altogether. Microsoft and other interested parties have until Wednesday to respond to the CMA’s provisional findings. A hearing to discuss potential remedies will take place in London later this month.

In the EU, its statement of objections and this week’s Brussels hearing will set the path for the kinds of formal remedies Microsoft will have to submit in the coming weeks. The EU aims to finalize its review by April 11.

The UK probe, which has focused on whether the deal will allow Microsoft to foreclose on rival console gaming platforms and cloud gaming service providers, is set to conclude by April 26. In the US, the Federal Trade Commission is locked in a lengthy legal process after formally suing to veto the transaction.

Game Over or Game On? Microsoft’s $69 Billion Deal Faces UK Test
Microsoft has repeatedly said it has no plans to make exclusive. The software giant has offered to keep on PlayStation for several years and a similar deal to Nintendo for its Switch console. Microsoft Gaming Chief Executive Officer Phil Spencer, who’s also attending the EU hearing, has maintained that the company’s plan is to seed its content across as many screens and systems as possible. Bloomberg

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