EU launches full-scale investigation into Microsoft, Activision deal

The European Commission has launched a full-scale phase 2 investigation to evaluate the previously announced acquisition of Activision Blizzard by Microsoft under the European Union (EU) Merger Regulation.

In January 2022, Microsoft signed an all-cash deal to acquire US-based video game publisher Activision Blizzard for $68.7 billion. Read more about Microsoft acquisition of Activision Blizzard here.

The proposed acquisition, however, raised regulatory concerns across the globe.

The European Commission said that its preliminary investigation found that the deal could lessen competition in the markets for the distribution of console and PC video games by a significant matter. The regulator added that it would impact multi-game subscription services and/or cloud game streaming services, and for PC operating systems as well.

Microsoft acquisition of Activision Blizzard. Image courtesy of Microsoft.

In its preliminary phase 1 investigation, the European Commission also found that Microsoft has the ability to foreclose access to Activision Blizzard’s console and PC video games, particularly for the Call of Duty game.

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

The Commission has time until 23 March 2023, to take a decision on the proposed Microsoft, Activision deal.

In September, the UK Competition and Markets Authority (CMA) said that it would begin an in-depth phase 2 investigation into the same deal after the phase 1 investigation found regulatory concerns.