Published in Gaming

EU to investigate Microsoft's Activision Blizzard deal

by on10 November 2022

Moving to phase II of monopoly investigation

The European Commission has announced that, following its initial investigation into Microsoft's proposed $69 billion acquisition of Activision Blizzard, it will now be opening a more "in-depth" Phase 2 probe to determine the deal's likely impact on competition.

The Commission said it had made the decision after its preliminary investigation showed Microsoft's acquisition may "significantly reduce competition on the markets for the distribution of console and PC video games, including multi-game subscription services or cloud game streaming services, and for PC operating systems".

It was worried that Microsoft had a "potential economic incentive" to prevent competitors from accessing Activision Blizzard's "high-profile and highly successful games" upon closure of the deal, specifically highlighting the Call of Duty. 

The European Commission also expressed concerns these same "high-profile and highly successful games" could be be made exclusive to Microsoft's multi-game and cloud streaming services to the detriment of similar rival services, and that the deal could potentially also be leveraged to discourage users from buying non-Windows PCs.

"Such foreclosure strategies could reduce competition in the markets for the distribution of console and PC video games," it wrote, "leading to higher prices, lower quality and less innovation for console game distributors, which may in turn be passed on to consumers."

The Commission will now launch an in-depth investigation to determine whether its initial competition concerns are confirmed. This second phase will last 90 working days, with a deadline for a decision now set at 23 March next year.

The UK's Competition and Markets Authority (CMA), has launched its own "phase 2" investigation into Microsoft's acquisition in September, after it determined the deal could give rise to a realistic prospect of a substantial lessening of competition in gaming consoles, multi-game subscription services, and cloud gaming services.

Several countries including Brazil's Administrative Council for Economic Defence (CADE) have already approved the deal.


Last modified on 10 November 2022
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