South Africa’s competition regulator, the Competition Commission, has approved Microsoft’s US$69 billion acquisition of videogame player Activision Blizzard in what will be the technology industry’s biggest-ever deal if consummated.
Although a decision by South Africa to block the transaction would have been unlikely to derail it, it is a small victory for Microsoft as it moves to convince other regulators, including the UK’s Competition and Markets Authority, which has launched a detailed probe into the deal.
The Competition Commission said on Monday that it has recommended to the Competition Tribunal that the deal be allowed to proceed, without any conditions attached.
Microsoft first announced the US$69-billion acquisition last January and has struggled since then to convince regulators to approve the transaction. Activision’s biggest franchise is Call of Duty, a shooter for PCs and gaming consoles, including Microsoft’s own Xbox platform and the rival PlayStation from Sony.
“The primary competition concern in this transaction arose from the concern that Microsoft may, post-merger, restrict the distribution of Call of Duty to the Microsoft console, Xbox, or make Call of Duty available on terms that exclude or undermine the ability of other console manufacturers to compete,” the Competition Commission said in a statement.
“The commission found that the proposed transaction is unlikely to result in significant foreclosure concerns as the parties do not have the ability and incentive to foreclose competing game distributors, particularly Sony and Nintendo. Furthermore, the merging parties have made undertakings to continue supplying Call of Duty games to other console manufacturers.
“Therefore, the commission found that the proposed transaction is unlikely to result in a substantial prevention or lessening of competition in any relevant markets. The commission further found that the proposed transaction does not raise any substantial public interest concerns,” it said in the statement.
