Summary of Commission Decision of 15 May 2023 declaring a concentration compatible with the internal market and the functioning of the EEA Agreement (Case M.10646 – MICROSOFT / ACTIVISION BLIZZARD) (notified under document number C(2023) 3139) (Only the English version is authentic) (Text with EEA relevance) 2023/C 285/05
Date: 2023-05-15
Institutions: Directorate-General for Competition, European Commission
Subjects: computer equipment, economic concentration, electronic game, merger control, software








C_2023285EN.01000801.xml










14.8.2023   


EN


Official Journal of the European Union


C 285/8






Summary of Commission Decision
of 15 May 2023
declaring a concentration compatible with the internal market and the functioning of the EEA Agreement
(Case M.10646 – MICROSOFT / ACTIVISION BLIZZARD)


(notified under document number C(2023) 3139)


(Only the English version is authentic)
(Text with EEA relevance)
(2023/C 285/05)

On 15 May 2023 the Commission adopted a Decision in a merger case under Council Regulation (EC) No 139/2004 of 20 January 2004 on the control of concentrations between undertakings (1)
, and in particular Article 8(2) of that Regulation. A non-confidential version of the full Decision can be found in English on the website of the Directorate-General for Competition, at the following address: http://ec.europa.eu/competition/elojade/isef/index.cfm?clear=1&policy_area_id=2

1.   THE PARTIES









(1)


Microsoft Corporation (‘Microsoft’ or ‘Notifying Party’, US) is a global technology company headquartered in Redmond, Washington, US. Microsoft offers a wide range of products and services to customers. Relevant to the Transaction, Microsoft is active in the video games business as a developer, publisher and distributor of video games for gaming consoles, personal computers (‘PCs’) and mobile devices. Microsoft also manufactures and offers the Xbox gaming console and related services, including a game subscription service called Game Pass (available for Xbox and PC), and a cloud game streaming services as part of Game Pass’ top-tier version, Game Pass Ultimate.












(2)


Activision Blizzard, Inc. (‘Activision Blizzard’, US) is a developer and publisher of video games based in Santa Monica, California, US. Activision Blizzard develops and publishes video games for gaming consoles, PCs and mobile devices, including franchises such as Call of Duty, World of Warcraft, Diablo and Candy Crush. Activision Blizzard also operates a digital storefront, Battle.net, for the digital distribution of its PC games.




2.   PROCEDURE









(3)


On 30 September 2022, the Commission received a formal notification pursuant to Article 4 of the Merger Regulation by which Microsoft intended to acquire sole control of the whole of Activision Blizzard.












(4)


By decision dated 8 November 2022, the Commission found that the proposed transaction raised serious doubts as to its compatibility with the internal market and initiated proceedings pursuant to Article 6(1)(c) of the Merger Regulation.












(5)


On 20 April 2023, the Notifying Party submitted final commitments (‘Final Commitments’) that render the concentration compatible with the internal market.












(6)


The final decision was consulted with the Member States during the Advisory Committee on Concentrations on 3 May 2023, which provided a favourable opinion. The Hearing Officer provided its favourable opinion on the proceedings in his report which was submitted on the same date.




3.   THE RELEVANT PRODUCT AND GEOGRAPHIC MARKETS









(7)


The decision identifies the following relevant markets:






(1)


Development and publishing of PC and console games, potentially segmented by (i) platform, i.e. between PC and console; (ii) game genres; and (iii) game types (i.e. between AAA (2) games and non-AAA games). The market for the development and publishing of mobile games was considered as a separate market, and not assessed further in the decision. The geographic scope is at least EEA-wide if not worldwide.










(2)


Distribution of PC and console games, potentially segmented by platform, i.e. between PC and console. The Commission considered that a distinction by (i) payment model (i.e. between buy-to-play and subscription); and (ii) type of access (i.e. between download and streaming) is not warranted. The distribution of mobile games was considered to be a separate market from the distribution of PC and console games, and not assessed further in the decision. The geographic scope is at least EEA-wide if not worldwide.










(3)


Supply of PC operating systems (‘OS’). The geographic scope is worldwide.








4.   COMPETITIVE ASSESSMENT









(8)


The Transaction gives rise to a number of horizontally affected relationships, because the Parties’ combined market share exceeds 20 % in several potential markets when considering different available metrics.












(9)


In addition, the Transaction creates vertical links between (i) Activision Blizzard’s game development and publishing activities upstream and Microsoft’s (ii) game distribution activities downstream. The Commission has assessed: (i) the potential customer foreclosure of developers and publishers of console games by restricting or degrading access to Microsoft’s console digital storefronts; (ii) the potential input foreclosure of Microsoft’s rival distributors of PC and console games via multi-game subscription services by restricting or degrading access to Activision Blizzard’s games; (iii) the potential input foreclosure of Microsoft’s rival distributors of console games by withholding or degrading access to Activision Blizzard’s (AAA) shooter console games; (iv) the potential input foreclosure of Microsoft’s rival distributors of console or PC games via cloud game streaming services, by restricting or degrading access to Activision Blizzard’s PC and console games.












(10)


The Transaction also gives rise to conglomerate relationships. In particular, the Commission has assessed two conglomerate relationships arising from links between Microsoft’s supply of the Windows PC OS and Activision Blizzard’s development and publishing of video games.




4.1.   No Horizontal concerns









(11)


The Commission has assessed possible horizontal, non-coordinated effects in a number of potentially affected markets for development and publishing of certain game genres (Shooter, Role-Playing, Action & Adventure, Racing & Flying) and types (AAA games only or AAA and non-AAA games together) of console and/or PC video games. The Commission also assessed possible horizontal effects in the market for the distribution of PC and console video games.












(12)


Regarding the horizontal links in the game development and publishing market, the merged entity’s combined market shares by revenues are below 20 % in the market for the development and publishing of console and PC games. However, in potentially narrower segments, market shares are higher (e.g., [30-40] % in the worldwide development of AAA shooter games on console or [30-40] % in the EEA-wide development of AAA Role-Playing games on PC). The Commission considers that the Transaction does not raise competition concerns as regards horizontally affected markets, primarily because in most cases the merged entity’s shares are limited, and because the increment in share brought about by the Transaction is marginal. For similar reasons, the Commission also considers that no concerns arise from the horizontal link in the distribution of PC and console games.




4.2.   Vertical effects

4.2.1.   No customer foreclosure concerns









(13)


Microsoft’s market share in the downstream market for the distribution of console games is [30-40] % worldwide in 2022. Therefore, the Commission has assessed potential customer foreclosure concerns deriving from the possible foreclosure of rival developers and publishers of console games from access to Microsoft’s console-specific digital storefront. The Commission considers that Microsoft would not have the ability or incentive to engage in a customer foreclosure strategy, primarily because its market share in the distribution of console games is relatively small compared to Sony’s. Therefore, Sony and Nintendo represent an effective alternative for third-party developers and publishers to distribute their games. Furthermore, post-Transaction Microsoft would maintain the incentive to offer third-party games on the Xbox console, to ensure the attractiveness of its game store to gamers.




4.2.2.   No input foreclosure concerns vis-à-vis rival distributors of PC games via multi-game subscription services









(14)


The Commission has assessed whether Microsoft would have the ability and incentive to foreclose competing distributors of PC video games that offer multi-game subscription services by including Activision Blizzard’s games in its own subscription service and withholding them from third-party subscription services. The Commission considers that the Transaction does not raise concerns in this regard, because Activision Blizzard does not license its PC video games to any multi-game subscription services, and the Commission did not find evidence that it would have started doing so absent the Transaction.




4.2.3.   Input foreclosure concerns vis-à-vis Microsoft’s rival distributors of console games









(15)


The Commission has assessed the risk of a targeted input foreclosure of rival distributors in the downstream market for distribution of console games through a restricted access to Activision Blizzard’s (AAA) shooter console games. The Commission considers that the Transaction does not raise concerns in this regard, for the following reasons.












(16)


In the first place, the Commission finds that Microsoft would likely not have the ability to engage in a targeted total or partial input foreclosure strategy with regard to rival distributors of console games.












(17)


First, the Commission found that console games of shooter genre and specifically Activision Blizzard’s AAA shooter console games are an important input for console game distributors. They attract a significant portion of users and account for a significant share of game-time on Xbox and PlayStation consoles and therefore impact consumers’ choice of console. Activision Blizzard’s AAA shooter Call of Duty franchise is widely regarded as one of or even the most successful franchise in the video gaming industry given its longevity, profitability and frequency of new title releases. In addition, Activision Blizzard’s console games and particularly Call of Duty are an important source of PlayStation’s revenue. Second, the Commission found that the merged entity has market power in the upstream market for development and publishing of AAA shooter (including battle royale) console games given significant market shares by revenue that exceeded 30 % on a worldwide basis in the last three calendar years.












(18)


However, the Commission considered that Sony would likely have effective and timely counter-strategies that it could deploy in order to react to potential foreclosure strategies. Sony is a vertically integrated distributor of console games, which develops and publishes popular AAA console games in its own game development studios, which would ensure the overall attractiveness of Sony’s PlayStation. Further, Sony is the leading distributor of console games with a very large share of the market worldwide and particularly in the EEA. Based on its strong position in console game distribution, Sony could, as it already did in the past, negotiate exclusivity agreements with other developers of popular AAA console games.












(19)


In the second place, the Commission finds that Microsoft would likely not have the incentive to engage in a targeted total or partial input foreclosure strategy with regard to rival distributors of console games. The Commission’s quantitative analysis showed that the switching rate in case of a total input foreclosure would be too low to make up for the likely losses of such a strategy. Therefore, restricting or degrading Sony’s access to Activision Blizzard’s console games would likely not be profitable for Microsoft because Microsoft’s losses resulting from such a foreclosure strategy would likely outweigh the potential gains.












(20)


In the third place, the Commission finds that regardless of whether Microsoft has either the ability or the incentive to foreclose rival distributors of console games, such strategy is unlikely to have any significant detrimental effect on competition in the downstream market for distribution of console games.












(21)


First, Sony holds a significant degree of market power in distribution of console games and is a leading supplier of console hardware worldwide and particularly in the EEA. Therefore, Sony has a large bargaining power and resources, which allow it to switch to alternative inputs by either developing successful AAA console games in-house or negotiating exclusivity with other independent developers and publishers. Second, the Commission has not found convincing evidence that the input foreclosure would cause significant losses to Sony’s user base so that it would inhibit Sony’s potential to invest in innovation and quality. In fact, the Commission’s quantitative analysis showed that the user switching rate in case of a total input foreclosure would not significantly impact Sony’s user base. Third, the Commission has not found convincing evidence that the partial foreclosure strategies implemented by the merged entity post-Transaction would significantly impede competition in the downstream market for console game distribution. To the contrary, past examples of partial exclusivity agreements for the distribution of Activision Blizzard’s Call of Duty have not had significant effects on Microsoft’s or Sony’s activities in the downstream market for distribution of console games. Finally, the majority of respondents to the market investigation do not believe the Transaction would have a negative impact on the market for the distribution of console game.












(22)


While the Commission’s assessment of the effects of the Transaction focused on Sony, Microsoft’s main competitor in distribution of console games, the Commission also found that Nintendo’s position in console game distribution is unlikely to be affected as a result of the Transaction. Only a small portion of Activision Blizzard’s game franchises are distributed by Nintendo. In particular, Call of Duty, which is Activision Blizzard’s largest console game by revenue is currently only distributed on the Xbox and PlayStation consoles.












(23)


Therefore, the Commission considers that the Transaction would not significantly impede effective competition on the downstream market for distribution of console video games, as a result of the merged entity’s targeted total or partial input foreclosure strategy by restricting or degrading access upstream to Activision Blizzard’s (AAA) shooter console video games.




4.2.4.   Input foreclosure concerns vis-à-vis Microsoft’s rival distributors of console or PC video games that offer cloud game streaming services









(24)


The Commission considers that the Notifying Party would have the ability and incentive to foreclose rival distributors of console and PC games via cloud game streaming services by restricting access to Activision Blizzard’s PC and console games.












(25)


While games normally run locally on the specific device where they are installed, cloud game streaming allows games to run in a remote server and to be streamed to the end user’s device. This enables users to play even complex video games on devices that would normally not support them. For this reason, cloud game streaming is largely ‘device-agnostic’: it allows, for example, to play a console game on a PC, or to play a complex PC game on an old or entry-level PC that would normally not support the game.












(26)


While cloud game streaming is a nascent industry trend, the Commission considers that it will become an important part of the distribution of PC and console games in the near future, based on industry reports and on feedback from the market investigation. Microsoft has invested significantly in cloud game streaming services and has made its cloud game streaming service Game Pass Ultimate the centrepiece of its ‘gamer-centric’ strategy, aiming at delivering games wherever gamers play, regardless of the device.












(27)


Activision Blizzard does not license its games to cloud game streaming services at the time of the decision. However, the Commission considers, primarily based on Activision Blizzard’s internal documents, that absent the Transaction Activision Blizzard would have likely started to license its games to cloud game streaming services, in particular those based on a buy-to-play business model (i.e., those platforms that allow users to stream games that they have already purchased from a digital storefront).












(28)


Considering the above, the Commission finds that Microsoft would have the ability to engage in a successful foreclosure strategy against rival cloud game streaming services, by making Game Pass Ultimate the only cloud game streaming service offering Activision Blizzard’s games. The Commission finds that Activision Blizzard’s games are an important input for cloud game streaming services, and therefore Activision Blizzard has market power in the development and publishing of console games. The Commission notes that the parties’ combined market share by revenue in 2022 in the development and publishing of console and PC video games is below the 30 % threshold. However, the parties’ share is higher in some possible narrower segments, especially when focusing on genres such as role-playing in the EEA and shooter games on a worldwide basis, and when looking at other metrics such as monthly active users or game-time. In this regard, role-playing and shooter games are particularly engaging and popular, and Activision Blizzard provides some of the most successful games in these genres, such as Call of Duty and World of Warcraft.












(29)


Post-Transaction, Microsoft would have the technical and contractual ability to withhold Activision Blizzard’s games from rival cloud game streaming services, and to release them for streaming exclusively via Game Pass Ultimate. In this case, rival cloud game streaming services would not have timely and effective counter-strategies. This is primarily because a large catalogue of popular content is key for their ability to compete, and PC and console games from other publishers would not be a satisfactory alternative to build a catalogue of games adequate to for third-party cloud gaming services to compete against Game Pass Ultimate, should the latter offer Activision Blizzard’s games with exclusivity.












(30)


The Commission also considers that Microsoft would have the incentive to foreclose rival distributors of PC and console games via cloud game streaming services. This is primarily because, given the high popularity of Activision Blizzard’s games, a foreclosure strategy would increase the number of gamers using Game Pass Ultimate’s cloud game streaming feature. Such increase would likely be significant, also thanks to the characteristics of Microsoft’s activities, which combine cloud game streaming services, subscription services and the Windows PC OS amongst others. The Commission considers that the losses from such foreclosure strategy would be limited compared to the gains.












(31)


Finally, the Commission considers that the effects of a foreclosure strategy on competition in the distribution of PC and console games would be significant. Cloud gaming is a rising trend and expected to become an important distribution channel, and a foreclosure strategy would raise barriers to entry or expansion of rival cloud game streaming services, which are generally not vertically integrated and would have to rely on a smaller pool of independent publishers. Furthermore, while cloud gaming is relatively small compared to the overall market, it is expected to increase significantly, and it is an important source of innovation.












(32)


Therefore, the Commission considers that the Transaction would significantly impede effective competition in the market for the distribution of PC and console games as a result of the merged entity withholding Activision Blizzard’s games from rival cloud game streaming services.




4.3.   Conglomerate effects









(33)


The Transaction gives rise to conglomerate links between Activision Blizzard’s games and Microsoft’s supply of the Windows PC OS. More specifically, the Commission considers, based on the results of the market investigation, that Microsoft would have the ability, post-Transaction, to foreclose rival providers of PC OS by tying the cloud game streaming of Activision Blizzard’s PC and console games to Windows.












(34)


First, the Commission finds that gaming is an important use case for PCs, and an important factor for competition between PC OS. Microsoft has a dominant position in the market for PC OS, with a worldwide market share of approximately [70-80] % (2022). As a consequence, most PC games, especially resource-intensive AAA games, are developed to run natively only on Windows, meaning that they can be downloaded and played locally only on a Windows PC. For that reason, the Commission did not find concerns that Microsoft could try to strengthen its position in PC OS by restricting the availability of Activision Blizzard to be played natively on other PC OS.












(35)


The Commission considers that cloud game streaming provides an effective way to play these games on other PC operating systems. The Commission further finds that gaming is an important factor for competition between PC OS and therefore considers that cloud game streaming, and in particular the streaming of Activision Blizzard’s games, would be important for non-Windows PC OS to compete more effectively with Windows. In this regard, it is recalled that absent the Transaction, Activision Blizzard would have started to license its games to cloud game streaming services. Consequently, given the popularity of Activision Blizzard’s games, Microsoft would have the ability to foreclose rival providers of PC OS by withholding Activision Blizzard games from other PC operating systems via cloud gaming. In such a scenario, the Commission considers that non-Windows PC OS would not have timely and effective counter-strategies available, primarily because, as explained above, third-party cloud game streaming services would not represent a satisfactory alternative.












(36)


As regards incentives to foreclose, since the Commission has already concluded that Microsoft would have an incentive to foreclose rival cloud game streaming providers, it considers that Microsoft has an even stronger incentive to do so when taking also the position of Windows in the PC OS market into account. In particular, the Commission considers that the gains derived from attracting or retaining users to Windows offset the foregone revenues from the distribution of Activision Blizzard’s games on third-party cloud game streaming services and PC OS.












(37)


Finally, the Commission concludes that, in light of the already dominant position of Microsoft in the market for PC OS, denying or degrading the availability of Activision Blizzard’s games via rival PC OS would have a significant impact on the market for PC OS. This is because a foreclosure strategy would increase users’ preference for Windows, thereby further increasing the barriers for rival PC OS to compete effectively. This compares to a counterfactual in which, absent the Transaction, such barriers would have been lowered, because Activision Blizzard would have likely licensed its games to third-party cloud gaming services, making them available for streaming on non-Windows OS.












(38)


The Commission therefore considers it likely that the transaction would significantly impede effective competition in the market for PC operating systems as a result of the merged entity foreclosing the supply of Activision Blizzard’s console and PC games to cloud game streaming providers and by not making GamePass Ultimate available on other PC operating systems.




4.4.   Conclusion









(39)


The decision, therefore, concludes that the notified concentration raises serious doubts as to its compatibility with the internal market with regard to (i) the input foreclosure of third-party distributors of PC and console games via cloud game streaming services and (ii) the foreclosure of rival providers of PC OS by tying the cloud game streaming of Activision Blizzard’s games to Windows.




5.   COMMITMENTS SUBMITTED BY THE NOTIFYING PARTY









(40)


In order to remove the competition concerns arising from the Transaction, the Notifying Party submitted commitments in Phase II. The Commission tested the first commitments submitted by Microsoft (the ‘Initial Commitments’) with market participants. Following feedback from this market test, the Notifying Party amended the commitments and submitted modified commitments (the ‘Revised Commitments’). The Commission undertook a second market test. The feedback from market participants has been shared with the Notifying Party which subsequently made further amendments to the commitment text and submitted a third remedy proposal (the ‘Final Commitments’).












(41)


All submitted commitments comprise two main elements: (i) a commitment to grant consumers the right to stream games for a period of 10 years (the ‘Consumer License Commitment’); and (ii) a commitment to grant to streaming providers a royalty-free license to stream games for a period of 10 years (the ‘Streaming Provider License Commitment’).




5.1.   The Initial Commitments

5.1.1.   The Consumer License Commitment









(42)


Under the Consumer License Commitment, Microsoft commits to grant consumers based in the EEA the right to stream all current and future PC games developed, either in part or in full, by the Activision Blizzard studios as listed in an annex to the Initial Commitments (‘Eligible Games’) from the closing date for a period of 10 years, by amending its end-user license agreements (‘Consumer License’) in accordance with Annex 3 of the Initial Commitments. Consumers will be granted this right regardless of whether the Eligible Game was obtained prior to or after the closing date.




5.1.2.   The Streaming Provider License Commitment









(43)


By the Streaming Provider License Commitment, Microsoft commits for a period of 10 years from the closing date to grant a royalty-free license to stream Eligible Games to streaming services in accordance with the terms in Annex 4 of the Initial Commitments (each a ‘Streaming Provider Licence’). In order to be considered eligible for this license, a streaming service needs to be either permitted by a game store authorized to sell Eligible Games (‘Authorized Game Store’) to provide access to Eligible Games; or offer access to Eligible Games through applications which do not require integration with an Authorized Game Store (in each case an ‘Eligible Streaming Service’).












(44)


Microsoft commits to grant Streaming Provider Licenses regardless of whether Microsoft currently streams or will in the future stream Eligible Games on its own cloud game streaming service. New releases, including publicly available beta versions and early access releases, will be accessible for streaming from the release of the game on a Microsoft Game Store (defined as Activision Blizzard’s Battle.net store or any successor digital PC Game Store) or any other store authorized to distribute an Activision Blizzard title.












(45)


In addition, Microsoft has entered into agreements with three cloud game streaming providers, namely NVIDIA, Boosteroid and Ubitus. These agreements include, for a period of 10 years from the closing date, a royalty-free, worldwide license to stream Eligible Games. As part of the Initial Commitments, Microsoft commits to grant these licenses under the terms as set out in annexes to the Initial Commitments.












(46)


Licenses granted under the streaming provider license commitment will be available on Microsoft’s website and subject to the following terms:






(a)


Unless otherwise agreed with the Authorized Game Stores, Microsoft may retain all revenue from game sales, in-app purchases and any other future game-related transactional revenue generated from Eligible Games on Eligible Streaming Services.










(b)


Eligible Streaming Services [business secrets concerning the market test questionnaire]; (ii) adapting their services, to the extent necessary in reaction to third-party rights mentioned under (i), to allow Consumers to stream Eligible Games; and (iii) compliance with relevant laws, including the Digital Services Act (3), the GDPR (4), the ePrivacy Directive (5), and privacy standards.








5.1.3.   Monitoring Trustee, Dispute Resolution and Duration









(47)


The Initial Commitments provide that a Monitoring Trustee must be appointed before the Notifying Party can close the Transaction. The Monitoring Trustee may in turn appoint an IT expert, or any advisors for corporate finance or legal advices, to assist in the performance of his or her duties and obligations.












(48)


A Fast Track Dispute Resolution is included, and will apply in cases where an Eligible Streaming Service (including Nvidia, Boosteroid and Ubitus), showing a sufficient legitimate interest, claims that Microsoft is failing to comply with its obligations arising from the Commitments.












(49)


The Initial Commitments would remain in effect for ten years from the closing date of the Transaction.




5.2.   The Revised Commitments









(50)


The Revised Commitments comprise the same two licenses as the Initial Commitments with the following improvements:






(a)


The licenses cover console games in addition to PC games.










(b)


To the extent different versions of a PC game for different operating systems exist, as well as all additional content, such as add-ons, download content or in-game purchases, such versions or content are expressly included under the licenses.










(c)


The licenses are available for cloud game streaming services that allow consumers to play, from the service provider’s cloud-based servers, PC or console games for which the consumers have already obtained a license for download of the game (including through either buy-to-play, free-to-play, or subscription).










(d)


The Streaming Provider License allows a streaming service to provide access to PC versions of Eligible Games by authenticating with the Microsoft Game Store and Microsoft commits, with consumer consent, to provide access to such data through a standard interface. This obligation is limited to streaming services that are already licensed to provide cloud game streaming by at least one major game publisher, as named in the Revised Commitments.










(e)


No circumvention via third-party IP rights.










(f)


The arbitration procedure can take place, at the choice of the cloud game streaming provider requesting it, in Brussels, Belgium.








5.3.   The Final Commitments









(51)


Compared to the Revised Commitments, the Final Commitments clarify the scope and limit the risk of circumvention or misinterpretation of the commitments. The main changes are:






(a)


The definition of an Authorized Game Store now also covers game stores that distribute Eligible Games via a multi-game subscription service.










(b)


The commitment to provide data about whether a consumer is entitled to play a game also covers Eligible Games for which a consumer has obtained a license via Game Pass.










(c)


The definition of Microsoft Game Store was amended to include any digital PC game store owned by Microsoft.










(d)


The list of major game publishers was expanded, the Commission is given a possibility to further amend this list during the term of the commitments and it is clarified that the determination of whether a streaming service is licensed to provide cloud game streaming by another major game publisher takes place at the time the Streaming Service seeks access to a Microsoft Game Store.










(e)


Microsoft commits not to terminate or degrade the existing availability of access to Eligible Games through publicly available application programming interfaces (‘APIs’).








5.4.   Assessment of the commitments submitted









(52)


In order to be acceptable, the proposed commitments must be capable of rendering a concentration compatible with the internal market as they prevent a significant impediment to effective competition in all relevant markets in which competition concerns were identified. In this case, the commitments needed to eliminate the competition concerns identified by the Commission, namely with respect to: (i) the input foreclosure of third-party distributors of PC and console games via cloud game streaming services and (ii) the foreclosure of rival providers of PC OS by tying Activision Blizzard’s games to Windows via Microsoft’s cloud game streaming service.












(53)


The decision concludes that the Final Commitments address the competition issues raised by the Transaction in their entirety. The Commission also concludes that the Final Commitments are capable of being implemented effectively and in a timely manner.




6.   CONCLUSION









(54)


For the reasons mentioned above, the decision concludes that, subject to full compliance with the commitments given by the Notifying Party, the proposed concentration will not significantly impede effective competition in the Internal Market or in a substantial part of it.












(55)


Consequently, the concentration should be declared compatible with the internal market and the functioning of the EEA Agreement, in accordance with Article 2(2) and Article 8(2) of the Merger Regulation and Article 57 of the EEA Agreement.






(1)  OJ L 24, 29.1.2004, p. 1.

(2)  AAA games refer to video games that are resource-intensive and complex to develop, and that offer advanced gaming experience and game-play mechanics.

(3)  Regulation (EU) 2022/2065 of the European Parliament and of the Council of 19 October 2022 on a Single Market For Digital Services and amending Directive 2000/31/EC (Digital Services Act) (OJ L 277, 27.10.2022, p. 1).

(4)  Regulation (EU) 2016/679 of the European Parliament and of the Council of 27 April 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data, and repealing Directive 95/46/EC (General Data Protection Regulation) (OJ L 119, 4.5.2016, p. 1).

(5)  Directive 2002/58/EC of the European Parliament and of the Council of 12 July 2002 concerning the processing of personal data and the protection of privacy in the electronic communications sector (Directive on privacy and electronic communications) (OJ L 201, 31.7.2002, p. 37).