Activision Blizzard/Microsoft: EU concerned about potential consequences of takeover

It was to be expected, the acquisition of Activision Blizzard by Microsoft cringe on the side of the European Commission (EC). In a Press release published on November 8, 2022, the guardian of the treaties announces a thorough investigation into the impressive proposed acquisition at 70 billion dollars.

The merger of the two video game giants is already being scrutinized very closely by the British regulator and the US competition authority, but this first opinion from the EC has something to calm Microsoft’s ardor.

Fears of distortion of competition

Brussels is concerned that Microsoft may, thanks to this takeover “lock down access to video games for consoles and PC from Activision Blizzard, including iconic and hugely successful games”. License call of duty is of course quoted, even if Microsoft has repeatedly claimed that this title will remain available on PlayStation. “The preliminary investigation indicates that Microsoft may have the ability, as well as the economic temptation, to implement strategies to foreclose competing console video game distributors”, writes the EC. Even if the games remain available on other platforms, Brussels fears that Microsoft will unbalance the competition by “degrading the conditions of access”.

Same for the cloud gaming. In its press release, the commission indicates that, “by acquiring Activision Blizzard, Microsoft can lock down access to its own video games for PC and consoles”. Put simply, the institution chaired by Ursula von der Leyen doesn’t want Activision’s big titles to become Game Pass exclusives. “to the detriment of competing console and PC video game distributors who offer such services”. This would create a distortion of competition to the detriment of physical distribution and would complicate the development of the emerging services of cloud gaming.

An investigation that goes beyond the world of video games

More interestingly, the investigation conducted by Brussels will go beyond the pure video game framework to look at the competitive advantage that such a takeover could offer. “in the PC operating system market”. According to the EC, the integration of Activision Blizzard within the Microsoft/Windows ecosystem could discourage “users to buy non-Windows PCs [et] reduce the ability of other PC operating system vendors to compete with Windows”. An interesting argument when Windows already has a substantial hold on the OS sector for computers.

Brussels has given itself until March 23, 2023 to investigate all these points and deliver its opinion. Even if Microsoft gets a green light, the merger of the two companies should obey drastic conditions. “We must ensure that this transaction does not drive out existing and future console/PC video game distributors or competing PC operating system vendors from the market”warned Ursula von der Leyen.

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