Belgium (AP) — The European Union has opened an investigation into Microsoft’s proposed acquisition of Activision Blizzard, the industry leader in video games, out of concern that the $69 billion transaction would distort fair competition for hit games like Call of Duty.
The deal to acquire the California-based game publisher was first announced by Microsoft, the company behind the Xbox gaming system, in January. However, antitrust authorities in the U.S., Europe, and other countries have not yet reviewed the deal.
The all-cash transaction would be the biggest in the history of the technology sector if it is approved.
Members of the European Commission, the 27-nation bloc’s executive arm, said in a statement Tuesday that “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 must make sure that opportunities are still available for current and potential PC and console video game distributors, as well as for competing PC operating system suppliers,” the commissioners stated. They must decide whether to approve the deal by March 23, 2023.
At the heart of the dispute is who gets to control future releases of Activision Blizzard’s most popular games, especially the first-person military shooter franchise Call of Duty.
This week, Activision announced that since its Oct. 28 release, Call of Duty: Modern Warfare 2 has sold more than $1 billion in total.
Sony, the manufacturer of the PlayStation and a competitor to Microsoft in the gaming market, has voiced its worries to regulatory bodies around the world about losing access to what it calls a “must-have” game title. In response, Microsoft has promised to keep Call of Duty on the PlayStation “for at least several more years” beyond its current contract with Sony.
Additionally, it has stated that it might make the game available on Nintendo’s Switch console, where it is not currently supported.
In a preliminary investigation, the EU discovered possible antitrust problems with video game distribution and restricting access to Microsoft’s competitors. The bloc said it “has concerns that the proposed acquisition may reduce competition on the market for PC operating systems.
Microsoft stated that it will continue to collaborate with the European Commission on the following steps “and to address any legitimate marketplace concerns.
Sony, the market leader, claims to be concerned about Call of Duty, but Microsoft has stated that it is committed to making the same game available on both Xbox and PlayStation on the same day. “We want people to have more access to games, not less.
Although the agreement has already been approved by Saudi Arabia and Brazil, crucial decisions must still be made by the U.S. Federal Trade Commission, the U.K. government, and the EU.
Tuesday’s decision was another example of how the EU has led the way on regulating Big Tech companies, opening antitrust investigations, enacting strict regulations on data privacy and pushing through landmark rules that threaten online platforms with billions in fines unless they respect fair market conditions and crack down on harmful content like hate speech and disinformation.
Microsoft stated to investors in October that it continues to anticipate the transaction to close in the first half of 2019.
But it’s possible regulators could impose conditions that force Microsoft to keep access open to Call of Duty for longer and ensure that its rivals aren’t getting a lesser version.
Antitrust authorities in the UK are among those paying attention to Sony’s worries.
The investigation into whether Microsoft could restrict access to Call of Duty and other games to its Xbox platform or “otherwise degrade its rivals’ access” by delaying releases or raising licencing costs was intensified last month.
“These titles require thousands of game developers and several years to complete, and there are very few other games of similar caliber or popularity,” according to a September report from the U. K. ’s Competition and Markets Authority.
Reporting from Providence, Rhode Island, was O’Brien.
Examine the Microsoft-Activision Blizzard deal in the EU’s Call of Duty
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