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Microsoft's Deal To Buy Activision Blizzard Fully Approved In South Africa Amid FTC Case In US

The deal has been unconditionally approved in another place.


Microsoft's deal to buy Activision Blizzard has been approved by another global regulatory body. South Africa's Competition Commission announced on April 17 that Microsoft has unconditional approval to close the deal through its sub-division called Anchorage (as of July 3, the recommendation to approve the deal has now been fully completed). This follows approvals of the deal in Saudi Arabia, Brazil, Serbia, Chile, and Japan. All of this is happening against the backdrop of the ongoing Microsoft/Activision Blizzard merger lawsuit in the US involving the FTC.

"The South African Competition Commission recommended approval of our merger with Microsoft based on a thorough review of the facts about competition in the gaming industry. We appreciate this additional affirmation from an important global regulator," Activision Blizzard CEO Bobby Kotick said in a press statement released earlier this year.

The Competition Tribunal in South Africa has now "unconditionally approved" the merger. What happened here is the Competition Commission recommended that the Competition Tribunal approve the deal, and the Competition Tribunal has now done just that.

In a media release, the Competition Commission said it has no significant concerns regarding the potential for Microsoft to make Call of Duty exclusive to Xbox. The main reason, the commission said, was because Microsoft does not have "the ability and incentive" to do so. Microsoft has argued over and over that it would make no financial sense to take Call of Duty off PlayStation because the playerbase on Sony's console is so large.

The commission added that Microsoft has already taken steps and signed deals to make sure Call of Duty continues to release on other console platforms in the future. Microsoft and Nintendo agreed to a 10-year deal for Call of Duty, for example. The same offer has been made to Sony, but the company--which has been one of the loudest critics of the deal--has not yet responded.

"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.

One of the key concerns raised by regulators in the UK has been around cloud gaming and Microsoft's potential ability to create unfair business conditions if the Activision Blizzard buyout is allowed to go through. South Africa's statement doesn't mention cloud gaming once presumably due to the lack of availability for cloud gaming services in the region.

The United States and the UK have yet to approve Microsoft's proposed deal to buy Activision Blizzard. The UK's Competition & Markets Authority will hand down its ruling by April 26. In the US, the Federal Trade Commission is suing Microsoft to try to block the deal. Microsoft responded by saying that it gave peace a chance and will now fight the US government in the courts just like it did years ago with the United States v. Microsoft Corp. lawsuit regarding personal computers. In that case, Microsoft and the government eventually settled, but it remains to be seen how things will play out this time with the Activision Blizzard deal.

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