The Brazil Administrative Council for Economic Defense (CADE) has officially approved Microsoft’s acquisition of Activision Blizzard after a lengthy assessment process that saw anti-competitive claims filed by Sony, and plenty of back-and-forth between the two companies.
The CADE approval was a major hurdle for Microsoft to overcome, and a necessary step in getting the entire Activision Blizzard deal through global regulators. So far, CADE is the second major body to approve the deal with no restrictions, following a similar ruling by the Saudi Arabia General Authority for Competition – which declared ‘no objection’ in its own assessment in August.
While only a minor hurdle in achieving wider approval for the deal, the CADE filing was significant for having such a hearty and public submissions process. On the path to approval, Microsoft had to contend with a variety of rebuttals from companies including Sony, Amazon, and Google, each of which had distinct opinions about whether or not the deal should be allowed to go through.
In the process of approval, Microsoft was required to submit evidence of the Xbox One’s poor performance against Sony’s PlayStation 4, as a means to prove it was not the dominant console in the market. This was done to reject claims that Microsoft acquiring Activision Blizzard would create an unfair monopoly in the games industry.
Likewise, Microsoft was also forced to detail its plans for the Call of Duty franchise, and explain multiple times that making the franchise exclusive was not a viable financial option.
During proceedings, the fight between Sony and Microsoft occasionally became rowdy, with Microsoft ultimately accusing Sony of blocking games from Xbox Game Pass, and Sony firing back with its own monopoly accusations.
To better argue Sony’s case in other regions, it’s alleged that PlayStation boss Jim Ryan personally flew to Brussels in September to meet with officials of the European Union and discuss his concerns about the seemingly imminent Activision Blizzard acquisition.
The result of this is currently unknown, but the CADE approval is a positive sign for Microsoft, which survived the intense grilling process, and the complaints levelled by Sony and other competitors.
The US $68.7 billion deal is yet to go through final approvals – Microsoft still needs to answer to the US Federal Trade Commission (FTC) and the UK Competition and Markets Authority (CMA), amongst other regulatory bodies – but it appears to be moving closer to completion.
European regulators have reportedly set a deadline of 8 November to pass judgement, while the UK regulatory body has set March 2023 as a long-term goal. Whatever the results, it appears we’ll hear more about the next stages of approval in the coming months.