The European Commission has opened what it calls an “in-depth investigation” into Microsoft’s proposed $68.7 billion acquisition of Activision Blizzard. Regulators in the EU first started looking at Microsoft’s Activision acquisition in September and set a provisional deadline of today to approve it or signal a more in-depth review.
Microsoft now faces a larger probe over its plans to acquire Activision Blizzard, with the European Commission set to take 90 working days up to March 23rd to take a decision. The Commission says it’s opening up an in-depth investigation because it’s “concerned that the proposed acquisition may reduce competition in the markets for the distribution of console” and PC games.
EU regulators are also concerned about Microsoft’s Activision deal for PC operating systems
The Commission also says it’s concerned that Microsoft “may foreclose access to Activision Blizzard’s console and PC video games,” including high-profile ones like Call of Duty. Regulators in the EU are also concerned about the potential for Microsoft to block distribution of Activision Blizzard games on rival subscriptions or cloud game streaming services.
These concerns mirror similar complaints from UK regulators, but the European Commission also says it’s concerned about competition for PC operating systems with this deal. “The Commission is concerned that Microsoft may reduce the ability of rival providers of PC operating systems to compete with Microsoft’s operating system Windows, by combining Activision Blizzard’s games and Microsoft’s distribution of games via cloud game streaming to Windows,” reads a statement from the European Commission. “This would discourage users to buy non-Windows PCs.”
It was widely expected that the European Commission would look more closely at Microsoft’s Activision deal, especially after the UK’s Competition and Markets Authority (CMA) signaled a closer look at the deal in September. That led to Microsoft pleading for its Activision deal before describing the CMA’s concerns as “misplaced” and accusing the regulator of adopting “Sony’s complaints without considering the potential harm to consumers.”
Whether we get quite the explosive response from Microsoft on the European Commission’s concerns remains to be seen, but the company has always maintained this will be a thorough process with regulators and that it’s expecting to close the deal by the end of its fiscal 2023 year, which ends in June 2023.