As expected, the European Commission will carry out a full-scale investigation into Microsoft’s $69 billion bid to buy Activision Blizzard. Following a preliminary probe, the European Commission announced Tuesday (via Reuters) it believes the deal may “significantly reduce competition” in a handful of areas, including the PC and console gaming markets, as well as among cloud gaming services.
According to the Commission's antitrust officials, Microsoft has the potential economic incentive to prevent competitors from accessing Activision Blizzard’s “high-profile and highly successful games,” including new Call of Duty entries. The body notes it’s also concerned the deal could unfairly advantage Windows against competing PC operating systems. On the surface, that seems like a strange concern, but it’s worth pointing out that the success of devices like the Steam Deck has made Linux something of a viable gaming alternative to Windows.
With today’s announcement, the European Commission now has 90 working days to complete its probe, a timeline that means a decision would arrive on March 23rd, 2023 at the latest.
“For years, Microsoft has been a major player across the gaming supply chain. It is acquiring Activision Blizzard, a highly successful producer of gaming content. We must ensure that opportunities remain for future and existing distributors of PC and console video games, as well as for rival suppliers of PC operating systems,” said Margrethe Vestager, the executive vice president of competition policy. “The point is to ensure that the gaming ecosystem remains vibrant to the benefit of users in a sector that is evolving at a fast pace.”
“We’re continuing to work with the European Commission on next steps and to address any valid marketplace concerns," a Microsoft spokesperson told Engadget. "Sony, as the industry leader, says it is worried about Call of Duty, but we’ve said we are committed to making the same game available on the same day on both Xbox and PlayStation. We want people to have more access to games, not less.”
Separately, Activision Blizzard published a letter from CEO Bobby Kotick. “This week the European Commission announced that we have entered the second phase of our review in the region. We will continue to cooperate with the European Commission where, in the countries they represent, we have many employees,” Kotick wrote. “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.”
The Commission won’t necessarily block the deal, but it could significantly delay the transaction and force concessions out of Microsoft. Xbox head Phil Spencer has proactively tried to placate regulators. “We're not taking Call of Duty from PlayStation. That's not our intent,” he recently said. “Our intent is not to do that and as long as there's a PlayStation out there to ship to, our intent is that we'll continue to ship Call of Duty on PlayStation.”
Update 1:24PM ET: Added comment from Microsoft.