The European Union has announced its plans to do a full investigation into Microsoft’s $68.7 billion bid for Activision Blizzard.
In a statement released today, the European Commission wrote that it’s “concerned that the proposed acquisition may reduce competition in the markets for the distribution of console and personal computers (‘PCs’) video games and for PC operating systems.”
With this investigation, the EU has given the deal its most high-profile scrutiny yet, and puts a wrench into the Xbox maker’s plans. Microsoft, in a statement provided to the Washington Post, said it would work with the Commission to “address any valid marketplace concerns.”
The Commission has determined that competition could be reduced should the merger be successful, and specifically believes that Microsoft’s buyout could stop third parties from distributing Activision Blizzard titles.
It also stated additional concerns about the PC market, and that Microsoft could put Activision Blizzard titles on the Xbox Game Cloud service. That latter move, said the Commission, could potentially serve as a way to “discourage users to buy non-Windows PCs.”
“The Commission is concerned that, by acquiring Activision Blizzard, Microsoft may foreclose access to Activision Blizzard’s console and PC video games, especially to high-profile and highly successful games.”
In its closing statements, the Commission gave a deadline of March 23, 2023 for its investigation.
“The opening of an in-depth inquiry does not prejudge the outcome of the investigation.”
Microsoft’s deal is also being scrutinized by the UK
Though Microsoft has been fairly confident that it’ll acquire Activision Blizzard, both the EU and UK are making it more difficult for Microsoft to complete the merger by spring 2023.
In September, the UK’s competition regulator, the Competition and Markets Authority (CMA), opened a inquiry into the deal. Microsoft had the option at the time to address the CMA’s concerns beforehand, but declined to do so.
For the UK, its primary concern has been about how the merger would affect Microsoft competitors, particularly Sony. The Call of Duty franchise has become a big driver in these conversations, with the PlayStation maker arguing that Microsoft will eventually lock off the shooter franchise to Xbox and Xbox Game Pass.
While regulators from other countries have given approval for the merger, Microsoft’s been on the defensive with the UK, and has tried making its acquisition sound like a benefit for players.
Since September, Microsoft has spent two full months in a verbal war with Sony over Call of Duty’s future on PlayStation, a future it insists will continue past the end of Sony’s current partnership with the franchise.
In that earlier statement to the Washington Post, Microsoft yet again repeated its commitment to keeping Call of Duty on PlayStation. “We want people to have more access to games, not less,” it wrote.
The United States has been quiet on Microsoft’s attempted merger thus far, but in March, senators such as Elizabeth Warren and Bernie Sanders urged for deeper scrutiny from the FTC.