Microsoft-Activision Blizzard merger faces 90-day ‘in-depth investigation’ in EU

Right on schedule, the European Commission announced on Tuesday that it is opening an “in-depth investigation” into the proposed $69 billion Microsoft-Activision Blizzard merger. The antitrust regulator has set a 90-day deadline for its final decision.

The Commission said in a press release that it has concerns the Microsoft-Activision Blizzard deal would reduce competition in the console and PC gaming market following its preliminary investigation. Similar to the UK’s Competition and Markets Authority, the EU regulators are worried that the merger could enable Microsoft to “foreclose access” to Activision and Blizzard Entertainment’s AAA video game IPs, particularly “Call of Duty.”

In simpler terms, foreclosure means Microsoft might take advantage of the acquisition to limit or fully block Xbox’s rival consoles and services from accessing games like “Call of Duty.” The European Commission said, “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.”

EU regulators are also concerned that Microsoft could have the capacity to reduce competition in the PC gaming market. The Commission said the company might use the proposed acquisition to limit the distribution of Activision Blizzard games and Xbox-published titles by making them exclusive to cloud streaming services supported only on PCs running Windows operating systems.

The reasons to be concerned about Microsoft potentially reducing competition with other PC operations systems are not as evident as the issues raised for its console rivals like Sony PlayStation. One of the currently well-known non-Windows PC gaming platforms is Valve’s Steam Deck, which uses a Linux-based SteamOS.

It is worth noting, however, that the handheld gaming PC can still run Microsoft’s gaming subscription and cloud streaming service on the device. Although, if a Steam Deck is not running on Windows, users cannot install the Game Pass app, so they would have to go through as many as 16 steps to make it work. But Microsoft developers previously said they are working to “greatly simplify” the process.

The EU regulators’ in-depth investigation will run for 90 days. It has set a deadline on March 23, 2023, to decide whether or not to approve the Microsoft-Activision Blizzard merger.

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