Activision Blizzard: EU has initiated phase 2 investigations

The EU has launched phase 2 investigations into the Activision Blizzard deal with Microsoft.

As you might expect, the EU has launched the second phase of investigations into Microsoft’s acquisition of Activision Blizzard, which Phil Spencer says is “fair and justified”. The EU issued numerous statements that led to phase 2.

“The Commission has concerns that the proposed acquisition could affect competition in the markets for the distribution of console and PC video games and PC operating systems,” the Commission said.

There are more versions here:

“In particular, the Commission is concerned that Microsoft’s acquisition of Activision Blizzard could foreclose access to Activision Blizzard’s console and PC video games, particularly high-profile and highly successful games (so-called AAA games) such as Call of Duty.”

“The preliminary investigation indicates that Microsoft has the ability and potential economic incentive to pursue foreclosure strategies against Microsoft’s competing console video game distributors, such as preventing those companies from distributing Activision Blizzard’s console video games on consoles or changing the terms of the use of, or access to, these video games.”

“The Commission is concerned that Microsoft’s acquisition of Activision Blizzard could foreclose access to its own PC and console video games, to the detriment of competing console and PC video game distributors who offer such services, as they are critical to the delivery of the nascent multi-game subscription and game streaming services in the cloud are critical.”

“Such foreclosure strategies could limit competition in the console and PC video game distribution markets, which could lead to higher prices, lower quality and less innovation from console game distributors, which in turn could be passed on to consumers.”

“Finally, at this stage of the investigation, the Commission has concerns that the proposed acquisition could reduce competition in the PC operating system market. In particular, the Commission is concerned that Microsoft could limit the ability of competing PC operating system vendors to compete with Microsoft’s Windows operating system by combining Activision Blizzard’s games and Microsoft’s distribution of games via cloud game streaming with Windows. This would discourage users from buying non-Windows PCs.”

“The preliminary investigation indicates that Microsoft has the ability and potential commercial incentive to do so towards competing PC operating system vendors.”

Microsoft and Activision Blizzard now have the task of eliminating these concerns with the EU Commission. Furthermore, the EU Commission now has until March 23, 2023 to make a final decision. Insiders now assume that the deal will fail.

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