The Competition and Markets Authority (CMA) has approved the Microsoft Activision deal following months of delay after the company made some concessions concerning its cloud gaming rights.

The original deal, which had amounted to an $69bn (£59bn) all cash acquisition, had to be completely refigured after the CMA dismissed it on grounds that Microsoft’s dominant role in the cloud industry would give it an unfair market advantage.

Microsoft originally appealed this decision, but to no avail. The CMA was therefore the only significant regulatory body standing in the way of one of the largest all cash acquisitions in business history. Activision is the company behind major global games including Call of Duty, Candy Crush, World of Warcraft, and Overwatch, with a market capitalisation of $74.29 billion (£60.91bn).

Microsoft’s cloud market dominance was the CMA’s main concern, and remains to be, as Ofcom has called on the CMA to do a formal investigation into the cloud market in the UK. Microsoft Azure and Amazon Web Services (AWS) make up about 60-70% of the UK cloud market, dominating the field and potentially stopping smaller cloud companies from emerging into and succeeding in the market.

For the cloud gaming sector, the CMA was concerned Microsoft’s cloud dominance would curtail fair market competition and raise prices for customers.

In order to still acquire Activision, Microsoft made a concession that would see Ubisoft, instead of Microsoft, acquire  Activision’s cloud gaming rights. This new deal will put the cloud streaming rights (outside the EEA) for all of Activision’s PC and console content produced over the next 15 years in the hands of an independent competitor with plans to offer new ways of accessing that content.

Upon this redraft, the CMA looked afresh at the deal and launched a new investigation, finally giving approval to the deal.

The CMA has said that the new deal will stop Microsoft from locking up competition in cloud gaming as this market takes off, preserving competitive prices and services for UK cloud gaming customers.

It will allow Ubisoft to offer Activision’s content under any business model, including through multigame subscription services. It will also help to ensure that cloud gaming providers will be able to use non-Windows operating systems for Activision content, reducing costs and increasing efficiency.

Sarah Cardell, chief executive of the CMA said: “The CMA is resolute in its determination to prevent mergers that harm competition and deliver bad outcomes for consumers and businesses. We take our decisions free from political influence and we won’t be swayed by corporate lobbying.

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“We delivered a clear message to Microsoft that the deal would be blocked unless they comprehensively addressed our concerns and stuck to our guns on that.

“With the sale of Activision’s cloud streaming rights to Ubisoft, we’ve made sure Microsoft can’t have a stranglehold over this important and rapidly developing market. As cloud gaming grows, this intervention will ensure people get more competitive prices, better services and more choice. We are the only competition agency globally to have delivered this outcome.

“But businesses and their advisors should be in no doubt that the tactics employed by Microsoft are no way to engage with the CMA. Microsoft had the chance to restructure during our initial investigation but instead continued to insist on a package of measures that we told them simply wouldn’t work. Dragging out proceedings in this way only wastes time and money.”