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Brazil Approves Microsoft's Activision Blizzard Acquisition

Brazil Approves Microsoft's Activision Blizzard Acquisition - News

by William D'Angelo , posted on 05 October 2022 / 5,851 Views

Brazil's Administrative Council for Economic Defense (CADE) has released its ruling on Microsoft's Activision Blizzard acquisition and has voted to approve the deal with no restrictions. 

Brazil's CADE is the second regulatory body confirmed to have approved the acquisition following Saudi Arabia's competition authority in August.

The official Brazil government website on CADE says it is "independent agency reporting to the Ministry of Justice, with its headquarters and legal establishment in the city of Brasília, Federal District, Brazil. The authority has jurisdiction over the national territory and performs its legal functions given by the Law Nº 12.529/2011.

"CADE’s mission is to ensure free competition. CADE is the body from the Executive branch of the Brazilian government responsible for investigating and deciding, ultimately, on competition issues, as well as responsible for fostering and promoting the culture of competition in Brazil."

Brazil Approves Microsoft's Activision Blizzard Acquisition

Microsoft's proposed acquisition of Activision Blizzard was announced in January of this year and still needs approval from several regulators around the world.

UK regulators, the Competition and Markets Authority (CMA), this week set a deadline of March 1, 2023 to publish its final report and decision on Microsoft's proposed Activision Blizzard acquisition. This is part of its more in-depth Phase 2 investigation.

Microsoft filed the Activision Blizzard deal with the European Commission last week. A provisional deadline of November 8 was set by the regulators to either approve the deal or to choose a more in-depth investigation.

There was a report this week claiming the Federal Trade Commission (FTC) in the US might release its ruling on Microsoft's proposed acquisition of Activision Blizzard by late November.

You can check out Brazil's CADE conclusion translated into English via Google Translate below:

Regarding the horizontal overlaps verified in the markets of game publishing, game distribution, online advertising and licensing for merchandising products, the analysis carried out indicated that the Operation would not be able to promote significant changes in their respective offer structures, in any of the scenarios considered - either because the concentration generated was less than 20%, or because the low variation of the HHI pointed to the inexistence of a causal link between this AC and possible possibility of exercising market power, according to parameters defined in Resolution No. 33, of April 14, 2022, from Cade.

With regard to possible vertical effects , an attempt was made to assess whether, as a result of the Transaction, Microsoft would have the ability or incentives to close any of the vertically related or complementary markets.

As for the possibility of closing the game publishing market (upstream), it was found that, despite Microsoft having control of a relevant portion of the console and digital game distribution markets (downstream), the company would not have incentives to make it difficult for publishers competing with Activision Blizzard to access its platforms, as this would necessarily imply a reduction in quantity and variety of the catalog of games available in the Xbox ecosystem, making the company's products and services less attractive to consumers.

With regard to the possibility of closing downstream markets , the analysis pointed out that, despite their relevance and popularity, Activision Blizzard games – and in particular the Call of Duty series– would not be essential assets to the performance of Microsoft's current and potential competitors in the console and digital game distribution markets (considering, in the latter, both digital stores and multiple game subscription services for PC and consoles). Thus, even if the Activision Blizzard game catalog were to become exclusive to the Microsoft ecosystem after the Transaction, SG/Cade considers that such exclusivity would not result in a substantial reduction in the levels of competition in the downstream markets, even if it could translate into a competitive advantage for Microsoft.

Furthermore, it is important to highlight that the central objective of CADE's activities is the protection of competition as a means of promoting the well-being of Brazilian consumers, and not the defense of the particular interests of specific competitors . After all, one cannot lose sight of the fact that the holder of the legal assets protected by Law No. 12,529/2011 is the collectivity, and not the competitor/economic agent as an individual entity. In this sense, although it is recognized that part of the users of PlayStation consoles (from Sony) could decide to migrate to Xbox in the event that Activision Blizzard games - and especially Call of Duty– become exclusive to the Microsoft ecosystem, SG/Cade does not believe that such a possibility represents, in itself, a risk to competition in the console market as a whole.

Finally, in relation to the existing complementarity between the activities of Microsoft and Activision Blizzard in the game publishing markets - and especially in the mobile games segment - and online advertising, it was found that the shares held by the Parties in these segments, in all scenarios examined, are well below the minimum percentage considered for the purpose of presumption of the possibility of closing the market, as defined in article 8, IV of CADE Resolution No. 33/2022.

It is concluded, therefore, that the possible vertical integrations and complementarities that may be generated or reinforced by the Transaction do not give rise to significant risks to competition, since no elements were identified that allow inferring the closure of any of the vertically related markets.

In view of the foregoing, it is concluded that the present merger is approved without restrictions.


A life-long and avid gamer, William D'Angelo was first introduced to VGChartz in 2007. After years of supporting the site, he was brought on in 2010 as a junior analyst, working his way up to lead analyst in 2012 and taking over the hardware estimates in 2017. He has expanded his involvement in the gaming community by producing content on his own YouTube channel and Twitch channel. You can contact the author on Twitter @TrunksWD.


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