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Chile Approves Microsoft's Activision Blizzard Acquisition

Chile Approves Microsoft's Activision Blizzard Acquisition - News

by William D'Angelo , posted on 29 December 2022 / 10,988 Views

Chile's regulatory authority, the Fiscalia Nacional Economica, has released its ruling on Microsoft's Activision Blizzard acquisition and has voted to approve the deal in Phase 1. 

The regulatory authority of Chile stated the deal "was not suitable to substantially reduce competition considering, among other evidence, patterns and preferences of video game consumers in Chile."

The report continues, "In its analysis of horizontal effects, the investigation ruled out risks, considering that in the markets where the parties overlap their activities the limits were not exceeded. market concentration thresholds established in the 2022 Horizontal Concentration Operations Analysis Guide , and that a large number of relevant competitors and a dynamic market were observed."

Chile's regulatory authority considered what would happen if Microsoft stopped releasing Call of Duty on competitor platforms, like PlayStation, and concluded Activision Blizzard "faces competitive pressure from players such as Electronic Arts, Take Two, Ubisoft and Epic Games, Sony and Nintendo, and that the relevance of Call of Duty would be comparatively less in Latin America than in other regions of the world.

"It was also considered that the number of consumers who would prefer to change the console in the face of a blocking strategy would also be lower, which was verified through a survey carried out with Chilean consumers, and that the significant income generated by PlayStation in favor of [Activision Blizzard] would discourage adoption. of a blocking strategy."

Chile Approves Microsoft's Activision Blizzard Acquisition

The regulatory authority concluded that it "ruled out the risks of tipping in the marketing of next-generation consoles and in subscription services (such as GamePass), since [Activision Blizzard]'s video games, although important, are not the most relevant for game consumers. Latin America and that the players in this market offer highly differentiated services.

"Tipping occurs when, once a certain scale of operation is exceeded, the markets tend to concentrate and eventually close under a single or dominant actor.

"In relation to a possible risk of blocking customers, the Prosecutor's Office concluded that Microsoft will not stop demanding video games published by third parties, since the computer video game distribution market has shown significant dynamism with the entry of new relevant players, highlighting the leading position held by Steam.

"On the other hand, in the video game distribution market for consoles there is significant competitive pressure from Sony and Nintendo, which would discipline the resulting entity and would operate as a relevant substitute client for competing publishers, including various players. and some of them are particularly relevant."

Activision Blizzard EVP Corporate Affairs and CCO Lulu Cheng Meservey via Twitter stated that "Chile’s competition authority, FNE, has now approved our acquisition by Microsoft, joining regulators elsewhere that have also recognized the deal’s benefits for competition and players.

"As other responsible regulators review the facts, we expect more approvals like this one."

The acquisition has also been confirmed to have been approved in BrazilSaudi Arabia, and Serbia unconditionally.

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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NobleTeam360 (on 29 December 2022)

Lulu really be putting the FTC in the dirt every chance she gets, lmao.

  • +18
Ryuu96 (on 31 December 2022)

It looks like the new thing is to accuse all of the countries that have approved this deal of being corrupt and some of them poor enough to accept easy bribes. I've got to say, I'm side-eyeing the superiority complex coming from some of you, acting as if USA/CA/EU/UK have absolutely no corruption and won't ever accept bribes, Lol.

If Microsoft can bribe these countries, they can bribe the rest so why haven't they approved yet and if they do eventually approve, are they also corrupt/bribed? I wouldn't accuse any of being bribed though because I have zero evidence that any of them have been bribed.

I'm really doubting that a few here actually read the reports from Brazil or Chile, Brazil's in particular was very thorough, highly detailed with facts and figures on the market and comments from multiple parties, unlike the FTC's complaint.

Brazil's CADE is actually a well respected regulatory body despite the comments here acting otherwise, CADE was one of the regulatory bodies holding back Disney/Fox to near the end, they were one of the last regulatory bodies to approve the deal and only did so with restrictions.

Brazil is also a top 10 country by gaming revenue and top 4 by audience.

According to Transparency International, Chile scored 67/100 (0 = Highly Corrupt & 100 = Very Clean). They drew with the United States and the highest score a country has is 88. Don't act like the vast majority of the world isn't full with corruption.

"131 countries have made no significant progress against corruption in the last decade. Two-thirds of countries score below 50, indicating that they have serious corruption problems, while 27 countries are at their lowest score ever."

Not sure why it is relevant though unless we have evidence of corruption and I'll repeat that I personally am not accusing any regulatory body of accepting bribes, a corrupt country doesn't mean absolutely every single thing in it is a failure.

The FTC is not being bribed but I think it is fair to say that they are being driven purely by politics right now, which makes sense considering their ideology changes depending on who is President. It also shows in their embarrassing losing streak lately and how they're currently being clowned in court against Meta for having awful evidence.

I'm not sure how anyone can read FTC's complaint against the deal and say that it looks well done when compared to something like CADE. There is zero facts or figures in it and completely made up markets to justify their decision.

Lets not mention how morale at the FTC is reportedly at an all time low or that multiple former FTC commissioners and a lawyer who helped take down Microsoft in the 90s have said how weak FTC's case is.

At least if the EU/UK do block the deal, they'd have done their due diligence and actually put some form of research in, the FTC has not, because their entire tactic is either hoping Microsoft abandons the deal or hoping that the CMA/EC block the deal and do the work for them.

We should want FTC to work better than this. It's lazy, weak arguments and very risky which could waste everyone's time (and taxpayers money) just to lose, again. Hoping that other regulatory bodies do the work for them and block the deal is not a good approach and will cause multiple losses in the future even if Microsoft ends up being blocked.

Nobody has actually attempted to block the deal yet, not even the FTC. They can at any time if they want to, sue to block the deal, they haven't. They're taking Microsoft through their internal courts first which does not block a deal, the only way to block a deal is to sue through the federal courts.

The date for their internal court to start is Aug 2023 - Past the closure date, that means Microsoft would have to re-negotiate the deal with ABK. FTC knows they have no case, no legal backing, no logical arguments, so they are instead opting for delay tactics in the hope that someone else blocks the deal or Microsoft abandons it.

Nobody knows what EC/CMA's stance will be yet, we do have vague reports that the deal is looking good in the EU and should pass with concessions, but even if they do block, I wouldn't necessarily agree with the decision but I'm pretty confident that I'd at least be able to say that they put some effort into their blocks unlike the FTC.

  • +16
SecondWar Ryuu96 (on 31 December 2022)

A far more reasoned take than some of the more cynical statements littering this article.

  • +4
G2ThaUNiT Ryuu96 (on 31 December 2022)

Let’s get this comment to the top!

Because apparently agreeing with a regulatory body’s investigation is just because their outcome aligned with my view and nothing to do with the body actually doing their research xD

  • +8
shikamaru317 Ryuu96 (on 31 December 2022)

This comment is pure 🔥, good work.

  • +6
2zosteven (on 30 December 2022)

so far the only roadblocks are US and its tail (british)

  • +7
SecondWar 2zosteven (on 31 December 2022)

Incorrect. Only 4 places have approved the deal - Brazil, Serbia, Saudi Arabia and Chile. All relatively small markets for Microsoft and Activision.
Beyond the US & UK, still to approve are the EU and separately its members, Japan, Australia, Canada etc.

  • -2
shikamaru317 SecondWar (on 31 December 2022)

None of those are currently expected to have any significant issues with the merger except for US' FTC, EU's EC, and the UK's CMA. The remedy Xbox has already given (CoD on other platforms for 10 years) is expected to be enough to clear the deal with most of the regulators. Xbox may need to give a few additional remedies to clear the EC and CMA and possibly a few other regulators (such as similar 10 year multiplat guarantees for other big ABK series like Overwatch and Diablo), but it should clear all of them in the coming months. FTC will likely give up on their hopeless case if CMA and EC both approve.

  • +6
SecondWar shikamaru317 (on 01 January 2023)

Quite possibly as the two companies have a relatively smaller presence there compared to the US, UK, EU. I think a few people are missing that and becoming unnecessarily cynical.

  • -4
tslog (on 29 December 2022)

Rest of the world is proving how incompetent, corrupt, politically partisan driven.......the US and British competition "authorities" truly are.
The most obvious deal should have been passed already.

  • +5
SecondWar tslog (on 30 December 2022)

I’m not sure British politics deserves to be tarred with the same brush as the US, although admittedly they aren’t great either. Equally the EU hasn’t approved it yet, nor have places like Japan and Australia.
Only 4 countries have approved it so far - Saudi Arabia, Brazil, Serbia and now Chile. Quite possibly as the two companies have a relatively smaller presence there compared to the US, UK, EU.

  • +1
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Hynad tslog (on 30 December 2022)
  • -12
Soonerman (on 31 December 2022)

I'm very impressed with Chiles thorough report. Qit ses they gave the task to people that understood the video game market unlike in the US where the FTC won't even pay a consulting firm that understands the video game market to explain. How this is not a monopoly.

  • +3
Mr Puggsly (on 31 December 2022)

Any word on Applebees or TGI Fridays?

  • +1
scrapking (on 29 December 2022)

This article has me thinking. A Microsoft blocking strategy might not be one-size-fits-all. In the same way that some Japanese games in the past have been exclusive to PS in Japan and/or Europe, but available on Xbox elsewhere, it would be possible for Microsoft to release Call of Duty on PS in North America and Europe (where most of the revenue is), but not in Asia/Africa/South America (where they won't annoy as many consumers, or give up as much revenue, but can nonetheless gain some marketshare).

Not saying they will. And I'm definitely not saying they should. But it's an interesting thought experiment. And a potential consequence of Sony not signing Microsoft's 10 year deal.

  • +1
AJNShelton (on 29 December 2022)

This Lulu person seems really angry toward the FTC

  • 0
Imaginedvl AJNShelton (on 29 December 2022)

She is an EVP at Activision Blizzard... That's kinda expected, no?

  • +11
AJNShelton Imaginedvl (on 30 December 2022)

Yes, but not at this level. I mean we don't see Phil tweeting "suck it, losers"

  • +2
Imaginedvl AJNShelton (on 30 December 2022)

True :) I think Microsoft and Activision Blizzard are playing good-cop/bad-cop tho.

  • +2
GaoGaiGarV (on 29 December 2022)

So far all the countries which approved the deal are ones where the black briefcases sent to the people in charge wouldn't even have to be filled half.

  • -9
G2ThaUNiT GaoGaiGarV (on 29 December 2022)

You’re hilarious. You misspoke countries that actually understand and do research into what they’re investigating.

  • 0
Hynad G2ThaUNiT (on 30 December 2022)
  • -12
VAMatt GaoGaiGarV (on 29 December 2022)

Another way to look at it would be to say that all of the countries that have approved it so far are ones that Microsoft, Activision, and Sony probably don't care about. So the bribes have been sent to the major, relatively more important markets, thus gumming up the works.

  • +8
Trentonater VAMatt (on 30 December 2022)

The objectively correct way to look at it is the countries that approved it are countries where the companies invoved do not have siginificant business and thus little impact on the consumers of that country. Which is already said in their explanation itself. obviously regulators in microsoft's largest markets would be the ones paying attention .

It's absurd to think that that there are bribes going around and they are unfavorable to the company capabl of making the largest purchase in industry history. And accusing the regulators of being fanboys because they are taking the obvious interrogation. I keep seeing the dumbest shit here recently.

  • 0
VAMatt Trentonater (on 30 December 2022)

There is a 100% chance of bribes. If you don't think bribes are being paid..... I don't even know what to say to that.

In the US, they're typically not done in the old fashioned hand over an envelope of money sense. Bribes in the US are "I hear your wife is looking for a job, we're looking for X consultant. It pays (3X the market wage). Would she be interested?" I don't know bribe protocol for the UK and EU. But, having spent a lifetime in business and a decade plus in politics, I can say with absolute certainty that bribes are being paid.

And the bribes do not need to favor anybody. Things move slowly when bribes are in play because that's how everybody gets paid.

  • 0
SecondWar VAMatt (on 30 December 2022)

That would certainly be a conflict of interest so if you have any evidence of that happening rather than just cynical conjecture you might do well to report it to the relevant authorities.

  • +4
VAMatt SecondWar (on 31 December 2022)

I don't have anything to do with this transaction, so I certainly don't have any hard evidence of anything. I just know how it works, because I've been around it my entire life. I would say that you need to do a little bit of research and apply some common sense to how western governments work. These entities are instruments of regulatory capture.

The conflicts of interest are innumerable. People move back and forth between the FTC and big business constantly. People leave the FTC and get consulting gigs with mega businesses or consulting firms that work with mega business. People leave mega business and take jobs in the top of the FTC. That's just how it works.

Anyway, you're free to ignore reality and continue living under a rock if you like. But, I'd advise you to stop doing that.

  • 0
SecondWar VAMatt (on 31 December 2022)

As someone who works for a government contractor, and who works in a team with several people who used to work for our main customer, we would get hung out to dry real fast if we were seen to be taking bribes.

People changing jobs is not a bribe. That what typically do - take different jobs in their field.
Also, if you don’t have evidence of it happening then it’s just cynical conjecture, like I said before, rather than ‘reality’.

  • +2
VAMatt SecondWar (on 31 December 2022)

Sounds like you are so used to it that you don't even realize the corruption. Possibly you are the corruption yourself.

If you don't think people moving back and forth between cushy gigs in and around the top levels of big business and the entities that are supposed to be regulating them isn't bribery then I'm not sure how we can even have a conversation on the matter. Seems like you are deliberately playing dumb.

And yeah, everything said in here is conjecture. Presumably none of us are involved in the transaction.

  • 0
zero129 VAMatt (on 30 December 2022)

Wow i as im sure the others who up voted you thought you where being sarcastic with your first post..

  • +1
VAMatt zero129 (on 31 December 2022)

No. I'm definitely being serious. If y'all don't think bribes are happening. You're living under a rock.

  • -2
Libara GaoGaiGarV (on 30 December 2022)

What a completely idiotic comment.

  • +4
ClassicGamingWizzz (on 31 December 2022)
  • -18
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