Brazil Administrative Council for Economic Defense (CADE) has published its verdict regarding Microsoft’s acquisition of Activision Blizzard, voting to approve the deal without restrictions. Brazil’s competition regulator, the CADE, has approved the Activision-Blizzards deal.
Brazils CADE is the second regulator confirmed to have approved Microsoft’s acquisition of Activision Blizzard, following the competition authorities in Saudi Arabia in August. More importantly, the Microsoft deal for Activision Blizzard was approved without restrictions, as regulator CADE did not believe that this would have any negative effects on the overall console market.
The ruling from Brazil as regulators goes on to say it believes that exclusive content has been very important to competition in the console market, and a major factor in the positions held by PlayStation and Nintendo as the market leaders. Summarizing its ruling, the CADE explained that because Nintendo does not depend on Activision Blizzards content in order to be successful in the video games market, and because PlayStation has been an industry leader for over 20 years, it does not see any reason why Acquire cannot continue.
Sony has tried to scuttle this buyout repeatedly, stressing to Brazil (and anyone else willing to listen) that Microsoft’s ownership of Activision Blizzard will not be fair to people who played its shooting game franchises on PlayStation. This is despite the fact that Microsoft representatives told Brazilian regulators that making Call of Duty a Microsoft exclusive would be unprofitable.
Brazil’s competition regulator, CADE, has approved Microsoft’s Activision Blizzard acquisition without restrictions. It says the decision was made for Brazilian consumers, and “not the defence of the particular interests of specific competitors.” pic.twitter.com/Ec9K0fHSSz
— Tom Warren (@tomwarren) October 6, 2022
In short, Brazil’s competition authorities did not consider Call of Duty an essential game to allow Microsoft to rival gaming distributors, since Nintendo, for instance, is competitive enough on its own games without having to depend on the Activision-Blizzards catalog. After a thorough examination of the games themselves, the Brazilian competition authority concluded that the games industry is competitive all the time, at least in Brazil, and that Microsoft’s market share of those markets in which the company is trying to compete is small, less than 20% across all potential segments.
That is, the one country is saying it has no obligation to defend the interests of any particular rival, such as Sony/PlayStation, and that even if Microsoft does indeed bring Call of Duty and any other Activision Blizzard games exclusively to the Xbox ecosystem, it is a move that will not harm competition in the market as a whole. Perhaps more importantly, one country does not even care that Microsoft is being unfair by keeping Call of Duty exclusive to Sony/PlayStation indefinitely, because the fact is even if Microsoft changes its mind, taking it is not a move that would fundamentally be anti-competitive to the market. Brazils CADE is the second regulator to have approved Microsoft’s takeover of Activision-Blizzard.