EU Launches In-Depth Probe of Microsoft’s

Following its preliminary inquiries into the $68.7B transaction, the European Commission announced Tuesday that it had launched a ‘phase II’ probe due to competition concerns. Microsoft may limit a competitor’s ability to compete with Microsoft’s Windows operating system. Regulators worldwide scrutinized the potential acquisition due to antitrust concerns when the gambling sector was consolidating.

The Commission is concerned. The proposed purchase may reduce competition for video game distribution and PC operating systems for consoles and personal computers (‘PCs’). The Commission has 90 working days to rule on the agreement until March 23, 2023.

According to its preliminary findings, the deal might considerably restrict competition in various areas.

The Commission worries that Microsoft may restrict access to Activision Blizzard’s console and PC video games, particularly high-profile and highly popular games (so-called ‘AAA’ games) like ‘Call of Duty. According to preliminary findings, Microsoft may have a potential economic motive to participate in foreclosure methods compared to Microsoft’s rival distributors of console video games. These foreclosure practices may limit competition in the secondary market for console and PC video games. This leads to higher costs, lower quality, and less innovation for console game distributors.

Finally, any proposed acquisitions during this investigation phase could weaken competition in the PC operating system market. In particular, the Commission is concerned with the integration of Activision Blizzard games and the distribution of Microsoft games through cloud game streaming to Windows.

Regulators in Saudi Arabia and Brazil have authorized the transaction. At the same time, the UK’s Competition and Markets Authority has expanded its probe into a second phase. It is currently requesting members of the public to provide feedback on the acquisition before making a final decision by March 1.