EU investigation into Microsoft-Activision transaction is intensifying

Microsoft failed to persuade the European Union during its preliminary examination despite numerous times reiterating its intention to keep its games available across various platforms even after the $68.7 billion Activision merger is completed. The commission moved to a deeper investigation after expressing worries that the acquisition would lead to “foreclosure techniques” that “limit competition in the markets for the distribution of console and personal computers video games and for PC operating systems.”

In a news release announcing the results of its first inquiry, the EU highlights the risk that Microsoft would bar rivals from playing console and PC games from Activision Blizzard, particularly Call of Duty. The commission further explains how Microsoft’s numerous resources, including its Windows PC operating system and cloud computing service Azure, already give it a significant consumer base. Additionally, it highlighted Microsoft’s standing as a publisher, distributor, and game developer. The EU thinks that the competition on the distribution of console/PC video games, multi-game subscription services, and cloud game streaming services may weaken as a result of the planned purchase of a firm with the same significant positions in the gaming sector.

The EU continued, “The preliminary investigation suggests that Microsoft may have the ability, as well as a potential economic incentive, to engage in foreclosure strategies vis-à-vis Microsoft’s rival distributors of console video games, such as prohibiting these businesses from distributing Activision Blizzard’s console video games on consoles or lowering the terms and conditions for their use of or access to these video games. “The Commission is concerned that, by acquiring Activision Blizzard, Microsoft may foreclose access, to the detriment of its rival distributors of console and PC video games that offer such services, to its own PC and console video games, which are crucial for the provision of the nascent services of multi-game subscription and cloud game streaming,” the statement reads. “When it comes to multi-game subscription services and/or cloud game streaming services in particular.”

The EU went on to say that if Microsoft takes these moves, the public may wind up paying more for games while receiving inferior quality and fewer advances. Last but not least, the commission asserts that the corporation may utilise the merger to enhance the standing and image of its Windows operating system and discourage consumers from purchasing non-Windows PCs.

In the end, the EU said that the extended investigation will run 90 working days, or until 23 March 2023.

Christopher Woodill

About ME

Enterprise technology leader for the past 15+ years…certified PMP, Six Sigma Black Belt and TOGAF Enterprise Architect. I collaborate with companies to help align their strategic objectives with concrete implementable technology strategies. I am Vice President, Enterprise Solutions for Klick Health.

Leave a Comment