European Commission Throws a Wrench Into Microsoft’s Acquisition of Activision; Opens Official Investigation

Today the European Commission officially announced the opening of an investigation on the proposed acquisition of Activision Blizzard.

The investigation, which is defined as “in-depth,” is born of the concern that the acquisition – valued at $68.7 billion – may reduce competition in the console and PC market.

A preliminary investigation by the commission alleges that the pending acquisition may “significantly reduce competition” by “foreclosing access” to Activision Blizzard’s video games, especially high-profile AAA ones like Call of Duty.

The investigation also alleged that Microsoft may have the ability and incentive to keep those games from rival consoles or degrade the condition of their use on those consoles.

There is also the concern that Microsoft may not allow the games to be distributed on rival subscription services.

According to the commission, those initiatives would indeed reduce competition, leading to higher prices, lower quality, and less innovation, which would affect customers.

We also read the concern about a reduction in competition in the PC market, as it could discourage users from buying non-Windows PCs.

Just yesterday, Activision CEO Bobby Kotick expressed confidence that the deal would go through as announced by June 2023. That echoed a similar sentiment mentioned the day before by Xbox Gaming CEO Phil Spencer. The acquisition has been overwhelmingly approved by Activision Blizzard’s shareholders.

This new investigation certainly has the potential to be an obstacle for the two companies. Luckily, we don’t have to wait too long for the next episode of this saga, as the commission promises that a decision will be taken by March 23, 2023.