Microsoft faces extensive probes in EU and UK over Activision Blizzard acquisition – Game World Observer

Regulators continue to scrutinize Microsoft’s proposed acquisition of Activision Blizzard. Right now, the company is facing two in-depth probes from watchdogs in the UK and EU.As reported by the Financial Times, the UK’s Competition and …

Regulators continue to scrutinize Microsoft’s proposed acquisition of Activision Blizzard. Right now, the company is facing two in-depth probes from watchdogs in the UK and EU.

As reported by the Financial Times, the UK’s Competition and Markets Authority (CMA) will launch a second, in-depth phase of its investigation this week.
Earlier this month, the regulator claimed that the $68.7 billion deal might affect competition by expanding Microsoft’s gaming library, harming its rivals like Sony, and making Activision Blizzard games exclusive to the Xbox ecosystem.
So the CMA asked the company to submit proposals to address antitrust concerns. However, two sources told the Financial Times that Microsoft refused to provide any remedies to the British watchdog.
According to people familiar with the matter, Microsoft decided to not cooperate with the CMA this time because the regulator would probably accept no undertaking from the company. As one competition lawyer said, it was “almost impossible” for Microsoft to move away from the in-depth investigation at this stage.
On top of that, regulators in Brussels also want to expand their investigation. Microsoft is expected to file its case in Brussels in the coming weeks, which would be followed by a prolonged EU probe.
This process will take some time because European regulators will have to scrutinize the deal. One person familiar with the details told the Financial Times that the acquisition “needs an extensive investigation” given its size and concerns from Microsoft’s competitors.
Last month, Brazilian regulators asked several game companies to comment on the upcoming merger.
Some publishers didn’t oppose the deal, with Ubisoft saying that Call of Duty has enough competitors such as Battlefield, PUBG, and Apex Legends. Riot Games also didn’t see any problem with Microsoft’s proposed acquisition of Activision Blizzard, naming Final Fantasy XIV and Runescape among World of Warcraft rivals.
Sony, however, was the one to openly express its concerns, stating that Call of Duty is a unique franchise and that no other company can make a rival with the similar level of success. It cited huge sales and the amount of money Activision invested in this IP as major factors that made the Call of Duty series impossible to compete with.
It is also worth noting that Sony has always been one of the main customers of Activision Blizzard. In 2020, it accounted for 17% of the company’s annual sales, or around $1.37 billion. Last year, its share dropped to 15%, which made it Activision’s third largest customer by revenue, above Microsoft and right behind Google and Apple.
So it is no surprise that PlayStation doesn’t want to lose Call of Duty, which still might become an Xbox exclusive in the future.
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