$100b Microsoft deal faces ‘in-depth’ investigation

The European Commission announced that it would be conducting a “phase 2” investigation into the Microsoft and Activision Blizzard buyout

The European Commission has announced that it will be opening a more “in-depth” phase 2 investigation into the Activision Blizzard and Microsoft merger, which is valued at a little over $100 billion AUD.

Published earlier on its website, the EC stated that the original investigation into the acquisition may “significantly reduce competition on the markets for the distribution of console and PC video games, including multi-game subscription services and/or cloud game streaming services, and for PC operating systems.”

The statement expressed the Commission’s concerns that Microsoft would have a “potential economic incentive” to lock competitors out from Activision Blizzard’s “high-profile and highly successful games,” which the Commission is worried could lead to pressuring users to purchase Windows PCs.

“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 statement reads.

The deal would give Microsoft control of Call of Duty, the largest shooter franchise in the world. Picture: Activision Blizzard

This second phase of the investigation will take 90 working days, and will conclude March 23rd next year. This follows a similar decision by the United Kingdom’s Competition and Markets Authority, or CMA, who also launched a “phase 2” investigation into the buyout.

The investigation has been acknowledged by Activision Blizzard, with CEO Bobby Kotick posting an open letter on the matter: “We have been working closely with Microsoft to actively engage regulators in other key countries to answer their questions and provide them with information to assist with their review. People from across our business units and functions have been involved in this regulatory work, and I want to thank each of you for your tireless work and commitment to completing this merger, which we continue to expect to close in Microsoft’s current fiscal year ending June 2023.”

The deal has been approved in some markets, however. Brazil and Saudi Arabia have already approved the buyout, with Brazil confirming its approval after a brief investigation period, where Sony filed objections.

Written by Junior Miyai on behalf of GLHF.