Microsoft’s $68.7BN play for Activision heads for in-depth EU antitrust probe too

The $68.7 billion gaming mega-merger between Microsoft and Activision Blizzard is dealing with intense competitors’ scrutiny within the European Union.

After the transaction was notified to the bloc’s regulators in late September, EU regulators were taking an early look at the proposed deal. But immediately the commission confirmed it would launch a deeper investigation – following in the footsteps of the UK antitrust authority which in September resumed its personal in-depth investigation.

one in Statement Immediately, the Commission stated that it included that the proposed acquisition could reduce competitors in the markets for the distribution of console and PC video games and similarly for the way PCs work – increasing costs and providing higher quality and quality benefits for customers. With the risk of diluting the novelty. “The Commission’s preliminary investigation suggests that the transaction could significantly reduce competition in markets for the distribution of console and PC video games, including multi-game subscription services and/or cloud game streaming services and PC operating systems. “

“Preliminary investigation suggests that Microsoft may have a potential economic incentive to engage in foreclosure strategies as well” face to face Microsoft’s rival distributors of console video games, such as prohibiting these companies from distributing Activision Blizzard’s console video games on consoles, or violating the terms and conditions for access or use of these video games.

“When it comes to multi-game subscription services and/or cloud game streaming services in particular, the Commission is concerned that, by acquiring Activision Blizzard, Microsoft may reduce access to the detriment of its rival distributors of console and PC video games. Provide services for your own PC and console video games that are critical to the provision of the nascent services of multi-game subscriptions and cloud game streaming.” In particular those associated with the threat of foreclosure affecting “high-profile and highly successful games” (so-called ‘AAA’ titles) – similar to Activision Blizzard’call of duty Voting.

With regard to the way PCs work – a space where Microsoft’s Windows platform dominates – the commission believes the deal could be better than rival suppliers’ Windows if Activision gets mixed with Blizzard’s video games. By reducing the flexibility to compete with the PC OS, it can reduce competitors on the market. Distribution of video games by Microsoft via Cloud Recreation Streaming in Windows.

“This would discourage users from purchasing non-Windows PCs,” adding: “Preliminary investigations suggest that Microsoft may have the potential to engage in such conduct, as well as potential economic incentives. face to face rival provider of PC operating systems.”

Commenting in a press release, Margaret Vestager, Commission EVP commanding the coverage of the contestants, added:

“Video games attract billions of users worldwide and are among the fastest growing forms of digital entertainment. For years, Microsoft has been a major player in the gaming supply chain. It’s acquisition of Activision Blizzard, a highly successful maker of gaming content We must ensure that opportunities remain for future and existing distributors of PC and console video games, as well as rival suppliers of PC operating systems. The point is to ensure that the gaming ecosystem continues to grow at a rapid pace. Stay alive for the benefit of users in the region. Our in-depth investigation will assess how the deal affects the gaming supply chain.”

The commission now has 90 working days – until March 23, 2023 – to decide whether to approve the takeover.

Alternatively, the EU may follow a conditional approval by accepting commitments from events that have a chance to negotiate and suggest remedies to handle competitors’ views during the merger evaluation course.

For example, such conditional acceptance may embrace an agreement to promote a portion of the mixed enterprise or license applied science to other market players.

Microsoft has already mentioned that it is dedicated to working with competing regulators around the world — but it certainly remains to be seen what suggestions the pair will likely make to waive the deal.

Given the size of the mega-merger, some sort of conditional approval appears to be the most likely outcome for Microsoft-Activision within the region – although the commission’s PR includes its customary disclaimer that “does not foresee the outcome of the opening of an in-depth investigation.” There is investigation”.

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