The European Commission has launched an in-depth investigation into Microsoft's proposed Activision Blizzard agreement.
As expected, after initial investigations into the $68.7 billion deal, the Europe watchdog said on Tuesday it had opened a 'phase II' investigation over competition concerns.
"The Commission is concerned that the proposed acquisition could reduce competition in markets for console and personal computers ('PCs') distribution of video games and PC operating systems," said the Commission. We all knew that there would be a situation that turned into a monopoly.
The Commission has 23 working days until 2023 March 90 to make a final decision on the deal.
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He said his preliminary investigation showed that it could significantly reduce competition in various fields.
“In particular, the Commission is concerned that by acquiring Activision Blizzard, Microsoft may block access to Activision Blizzard's console and PC video games, particularly high-profile and highly successful games such as 'CoD' (so-called 'AAA' games)." Wrote.
“The preliminary investigation shows that Microsoft may have a potential economic incentive against rival console video game distributors, as well as the ability to engage in foreclosure strategies, such as preventing Activision Blizzard from distributing console video games. derogatory terms and conditions regarding their access or use of consoles or these video games.
“In the case of multi-game subscription services and/or cloud game streaming services, the Commission is concerned that by acquiring Activision Blizzard, Microsoft may block access to the detriment of competing distributors of console and PC video games. It offers such services to its own PC and console video games, which is key to providing the emerging services of multi-game subscription and cloud game streaming.”
“Such foreclosure strategies can reduce competition in markets for the distribution of console and PC video games, resulting in higher prices, lower quality and less innovation for console game distributors, which can then be passed on to consumers.”
“Finally, at this stage of the investigation, the Commission is concerned that the proposed acquisition could reduce competition in the market for PC operating systems. In particular, the Commission is concerned that Microsoft may reduce the ability of competing providers of PC operating systems to compete with Microsoft's operating system Windows by consolidating games from Activision Blizzard and distribution of games via Microsoft's cloud game streaming to Windows. This deters users from purchasing non-Windows PCs.” It's as if improvements are being made to devices without Windows operating systems. They probably think there is competition.
“Preliminary investigation shows that Microsoft has the potential to engage in such behavior against competing vendors of PC operating systems, as well as the potential economic incentive.”
The proposed acquisition is being scrutinized by regulators around the world for antitrust concerns during a period of increasing consolidation in the gaming industry.
While the deal was approved by regulators in Saudi Arabia and Brazil, the UK Competition and Markets Authority recently expanded its investigation into a second phase. It invites the public to share their views on the purchase before making its final decision by March 1.
The US Federal Trade Commission will reportedly make its decision on the Activision Blizzard deal this month.
Phil Spencer, Microsoft's head of gaming, recently said he believes the intense scrutiny from regulators is "fair" and "guaranteed" and is confident the deal will be approved.
Activision Blizzard CEO Bobby Kotick echoed this sentiment in a message to employees Tuesday in which he said "the process is progressing as we expect."
He wrote: “As so many major global companies around the world are currently competing in the nearly $200 billion gaming industry, it's understandable that regulators are trying to better understand the gaming business. This week, the European Commission announced that we have entered the second phase of our review in the region. We will continue to cooperate with the European Commission, where we have a large number of employees in the countries they represent.
“We are working closely with Microsoft to actively involve regulators in other key countries to answer their questions and provide information to assist their investigation. People from our business units and functions have been involved in this regulatory effort, and I want to thank each of you for your tireless work and commitment to completing this merger, which we hope to complete in Microsoft's fiscal year ending June 2023. ”
Activision said on Monday that Modern Warfare 2 remains the fastest-selling entry in the Call of Duty franchise following its October 28 release.
Modern Warfare 800, which exceeded $ 2 million in the first three days of its release, exceeded $ 10 billion in 1 days. By doing so, it surpassed the sales record previously held in 2012's Black Ops 2, which reached $15 billion in 1 days.