The EU Wants to Know if Microsoft’s Activision Merger Will Deter Competition

The EU Wants to Know if Microsoft's Activision Merger Will Deter Competition

According to an EU document seen by Reuters, EU antitrust investigators are asking game makers whether Microsoft will be motivated to prevent competitors from playing Activision Blizzard’s top-grossing titles.

Microsoft’s acquisition of Activision Blizzard has drawn considerable attention from the gaming community. The deal, if approved, would see Microsoft owning the Call of Duty IP as well as other IPs in the Activision Blizzard repertoire, including Warcraft, Candy Crush, Tony Hawk, Diablo, Overwatch, Spyro, Hearthstone, Guitar Hero, Crash Bandicoot, and StarCraft

The EU document demonstrates that the proposed acquisition, the largest acquisition in the gaming industry, will help Microsoft better compete with tech leaders like Tencent or Sony. The EU competition enforcer also questioned whether Activision’s vast user database would give the American software giant a competitive advantage in the development, publishing, and distribution of computer and console games.

The Eu Wants To Know If Microsoft'S Activision Merger Will Deter Competition 2

The European Commission is anticipated to launch a four-month inquiry following its decision next month, highlighting regulatory worries about Big Tech acquisitions.

Microsoft will have to wait until November 8 to see whether the European Commission will allow the deal to move forward. After all, the transaction is being reviewed by worldwide regulators due to antitrust concerns at a time of rising concentration in the gaming sector, so every piece of investigation is warranted.

It’s incredibly important for regulators to examine everything with a fine tooth comb and truly understand what the implications of a deal like this are. Microsoft has already gone to great lengths to argue its side of the deal by launching a website that clearly lays out the benefits to players, developers, and the industry and what some of its plans are long-term.

The U.K.’s Competition and Markets Authority expressed concern last month that Microsoft’s acquisition of Activision would “significantly lessen competition” in the gaming industry, so regulators there are also keeping an eye on the deal.

The Eu Wants To Know If Microsoft'S Activision Merger Will Deter Competition 1

Sorcha O’Carroll, senior director of mergers at the CMA, said, “We are concerned that Microsoft could use its control over popular games like Call of Duty and World of Warcraft post-merger to harm rivals, including recent and future rivals in multi-game subscription services and cloud gaming,” Microsoft stated that it is willing to work with the CMA to allay its concerns.

Regulators also wanted to know if the purchase would result in an adequate number of alternate vendors and if Microsoft would choose to make Activision’s games exclusively available on its Xbox, Games Pass, and cloud game streaming services.

They questioned the importance of the Call of Duty franchise to console game publishers, managers of computer multi-game subscription services, and providers of cloud game streaming services.

Another query was if competitors like NVIDIA GeForce NOW, PlayStation Now, Google Stadia, Amazon Luna, and Facebook Gaming would be viewed favourably when the transaction was finalized. 

The questionnaire, which has around 100 questions, must be completed by October 10, 2022.

Both the UK’s Competition and Markets Authority and the US Federal Trade Commission are currently in the second stage of their investigations. According to reports, the first may decide by the end of November, while the second is expected to submit its final findings on March 1, the results of which may drastically affect the gaming industry. 

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