An in-depth phase 2 investigation into the deal was launched by the EC in late 2022 as it believed that the proposed deal would lead to a significant reduction in competition within the markets for the distribution of gaming consoles and PC video games and for PC operating systems
Microsoft receives formal warning from EU over Activision Blizzard deal. (Credit: w:User:Coolcaesar/Wikipedia.org)
The European Union (EU) has reportedly issued a formal antitrust warning to Microsoft over its previously announced $68.7bn acquisition of US-based video game holding firm Activision Blizzard.
EU antitrust officials outlined the reasons why the merger would jeopardise fair competition in the video game industry in the statement of objections addressed to Microsoft, reported Politico, citing three undisclosed sources having knowledge about the matter.
A Microsoft spokesperson, has been quoted by the publication, as saying: “We are listening carefully to the European Commission’s concerns and are confident we can address them.”
An in-depth phase 2 investigation into the deal was launched by the European Commission (EC) in November 2022.
According to the regulator, the proposed deal would lead to a significant reduction in competition within the markets for the distribution of gaming consoles and personal computer (PC) video games and for PC operating systems.
The commission also stated that the proposed merger would lead to increased prices, lower quality, and less innovation for distributors of console games which could eventually affect the consumers.
The all-cash acquisition of Activision Blizzard was announced by the US tech major in January 2022. As per the terms of the agreement, shareholders of the publicly-listed Activision Blizzard will receive $95 per share from Microsoft.
In December 2022, the US Federal Trade Commission (FTC) also made an administrative complaint seeking to block the Microsoft, Activision Blizzard deal.
The US federal agency said that the merger would result in Microsoft suppressing rivals to its Xbox gaming consoles and its quickly expanding subscription content and cloud-gaming business.
The deal has been expected to close in the fiscal year 2023, subject to customary closing conditions, regulatory reviews, and Activision Blizzard’s shareholders’ approval.