Microsoft's acquisition of the California-based developer Activision Blizzard is undergoing an in-depth investigation by the European Commission. According to the Commission, the investigation is to ensure the deal doesn’t pave a path for Microsoft's monopoly in the console, gaming, and PC Operating Systems industry.
Activision and Microsoft are both developers and publishers of video games, consoles, PCs, mobile devices, and more. The acquisition was announced earlier this year in January and was worth $68.7 billion. The news rose concerns not only for competing businesses but also for the UK Competition and Markets Authority.
The latest announcement states that the European Commission has initiated an in-depth investigation into the business deal to ensure the acquisition is not detrimental to the competitiveness of the gaming and PC industry. The Commission believes the deal reduces competition in the distribution of video games and consoles, multi-game subscriptions, and PC operating systems. There are fears that Microsoft might foreclose or degrade the terms and conditions of featuring popular games like Call of Duty. Hence, competing businesses could be prevented from distributing console video games by Activision Blizzard.
This issue is more grave regarding multi-game subscription services and cloud gaming services where, if Microsoft restricts access to services to its PC and console video games, not only would consumers face higher prices, the competition in the market would deteriorate. Similarly, for PC operating systems, the Commission worries that Microsoft’s rivals may not be able to compete with Microsoft Windows OS. It would also harm non-Windows PC producers.
Margrethe Vestager, the Executive Vice-President in charge of competition policy, mentioned:
“We must ensure that opportunities remain for future and existing distributors of PC and console video games, as well as for rival suppliers of PC operating systems. 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. Our in-depth investigation will assess how the deal affects the gaming supply chain.”
The Commission has 90 days to complete the investigation to decide whether the concerns are valid or not. It will pass its decision on March 23, 2023.
Source: European Commission
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