Microsoft’s $68.7 billion deal to acquire Activision Blizzard passed another hurdle earlier this week. The Brazilian Administrative Council for Economic Defense (CADE) has approved the merger with no restrictions. Here’s what CADE mentions in its decision: The regulatory body argues if Microsoft decides to make Call of Duty an exclusive title, the players who are loyal to the PlayStation brand can opt to play other titles available on their chosen console. It also mentions that while the move to make titles exclusive could be a profitable strategy for Microsoft, the company will also risk sacrificing a chunk of its sales and popularity. The resolution also states that exclusive content is very important for competition and this strategy has been employed by both Sony and Nintendo. The regulatory body notes that the strategy has been a key factor in Sony and Nintendo’s position as market leaders, saying: The verdict also mentions that CADE’s mandate is to protect the interest of consumers in Brazil and “not the defense of the particular interests of specific competitors.” The entire resolution can be read from the CADE website. The document is written in Portuguese but can be translated using Google Translate. As already seen, Nintendo does not currently rely on any content from Activision Blizzard to compete in the market. In turn, Sony has several predicates – strength of the world’s leading brand for more than 20 years, extensive experience in the sector, largest user base, largest installed base of consoles, robust catalog of exclusive games, partnerships with multiple publishers, brand loyal consumers, etc. – which should contribute to maintaining the competitiveness of PlayStation in a possible post-Operation scenario, even in the face of possible loss of access to Activision Blizzard content. Brazil’s CADE is the second regulatory agency that has approved the merger. Saudi Arabia’s General Authority for Competition gave a no-objection certification in August. The next hurdle for Microsoft are the U.K. Competition and Markets Authority (CMA) and European Commission. The European Commission has until November 8, 2022, to approve the deal or decide to conduct a more in-depth investigation. The CMA has set a deadline of March 1, 2023, to publish its findings on the deal. The U.S. Federal Trade Commission will reportedly also give its ruling on the deal by the end of November.
