The home of Sony and Nintendo looks like it'll be greenlighting Microsoft's proposed merger with Activision Blizzard. Japan's competition regulator has said that it would not be blocking the deal in a further boost to Microsoft's chances of closing its $68.7 billion acquisition.
The Japan Fair Trade Commission published a statement (thanks VGC) in which it concluded the proposed deal is "unlikely to result in substantially restraining competition in any particular fields of trade" and that it would "not issue a cease and desist order". Explaining its decision, the JFTC concluded in its review that the deal did not violate any of its anti-competition rules and that the merger "falls under the safe harbor criteria for vertical business combinations".
While Sony has been very energetic arguing against the merger to go ahead to various regulators — most notably in the US, EU, and UK — with points that it would foreclose competition as it snaps up Call of Duty, among other arguments, it seems the regulator in its native land has concluded it's all fine.
"There are competing businesses, and games are distributed in digital format, so it is unlikely that there will be a shortage of supply capacity", the Japan Fair Trade Commission said.
It will certainly be welcome words for Microsoft as it seeks to reassure other regulators that the deal won't be anti-competitive. One of the biggest obstacles was considered the UK's Competition and Markets Authority, which had released a number of concerns in a published statement in February, and had even suggested Microsoft would have to sell off Call of Duty in order for the deal to go ahead.
However, last week, the CMA signalled that it no longer believes the proposed acquisition would significantly reduce competition in consoles. It updated its provisional findings after receiving new evidence that allayed some of its concerns over the deal, such as Microsoft making Call of Duty exclusive to Xbox. Such a strategy of exclusivity would be "significantly loss-making under any plausible scenario" the CMA concluded after receiving fresh data regarding the issue. The CMA's final report on the merger is due April 26.