EU joins UK by probing Microsoft acquisition of Activision Blizzard

The European Commission has opened an in-depth investigation into the proposed acquisition of computer games giant Activision Blizzard by Microsoft.

This follows the UK’s decision a couple of months ago to have a proper butcher’s at the move, which would result in a significant consolidation of the gaming market. While it’s tempting to conclude the EU looks to Britain for anti-trust guidance, the difference in timings is probably down to the lower bureaucratic burden shouldered by the UK since it left the bloc. To say the EU doesn’t believe in rushing things would be an understatement.

So, almost ten months after the deal was announced, the EC has decided its time to start thinking about how it feels about it. To be fair it did manage a preliminary investigation in that time, which led to the conclusion that ‘the transaction may significantly reduce competition on the markets for the distribution of console and PC video games, including multi-game subscription services and/or cloud game streaming services, and for PC operating systems.’

The biggest concern seems to be that, as the owner of the Xbox console platform, as well as the dominant PC operating system, Microsoft could prevent its competitors, such as Sony’s PlayStation, from accessing Activision Blizzard games. Since those include very popular titles such as Call of Duty, Overwatch and Warcraft, that puts a lot of additional power in Microsoft’s hands. That same power could equally be applied to game subscription and streaming services, as well as the Apple Mac PC ecosystem.

“For years, Microsoft has been a major player across the gaming supply chain,” said Margrethe Vestager, who in charge of competition policy for the EC. “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. 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. Our in-depth investigation will assess how the deal affects the gaming supply chain.”

The Commission has now challenged itself to turn around the investigation in a lightning four and a half months, ambitiously committing to a 23 March 2023 deadline for its decision. The good news for its harried investigators is that the market distorting potential of this move is completely obvious so, with any luck, they won’t have to resort to drastic measures such as having lunch at their desks.

A decade or two ago a move like this would probably have been less contentious and been waved through after token concessions. However, global regulators have belatedly realised control of much of the economy now lies in the hands of a few US tech giants and are determined to show they’re doing something about it. Microsoft, of course, is one of those giants, so we expect the EU and the UK to eventually block this acquisition.

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