EU launches investigation into Microsoft’s planned acquisition of Activision

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BRUSSELS (AP) — The European Union has launched an investigation into Microsoft’s planned acquisition of video game giant Activision Blizzard, fearing the $69 billion deal will distort fair competition from popular titles like Call of Duty.

Microsoft, maker of the Xbox gaming system, first announced the deal to buy the California-based game publisher in January but is still awaiting scrutiny from antitrust regulators in the US, Europe and elsewhere. If it goes through, the cash deal would be the largest in tech industry history.

Members of the European Commission, the executive arm of the 27-nation bloc, said in a statement Tuesday that “the point is to ensure that the gaming ecosystem remains vibrant for the benefit of users in a sector that is evolving at a rapid pace.” accelerated”.

“We must ensure that opportunities continue to exist for current and future distributors of PC and console video games, as well as rival providers of PC operating systems,” the commissioners said. They have until March 23, 2023 to decide whether to approve the deal.

At the heart of the dispute is who will control the future releases of Activision Blizzard’s most popular games, especially the Call of Duty military first-person shooter franchise. Activision said this week that its latest installment, Call of Duty: Modern Warfare 2, has already generated more than $1 billion in sales since its launch on October 28.

Microsoft’s console rival Sony, maker of PlayStation, has raised concerns about losing access to what it describes as a “must-have” game title to regulators around the world. In response, Microsoft promised to keep Call of Duty on PlayStation “for at least several more years” beyond its current contract with Sony. He has also said that it could be available on Nintendo’s Switch console, where the game is not currently available.

In a preliminary investigation, the EU found possible antitrust problems with the distribution of video games and the stopping of access to Microsoft’s rivals. The bloc said it is “concerned that the proposed acquisition may reduce competition in the PC operating system market.”

Microsoft said it will continue to work with the European Commission on next steps “and to address any valid market concerns.”

“Sony, as an industry leader, says it is concerned about Call of Duty, but we have said we are committed to making the same game available on the same day on both Xbox and PlayStation,” Microsoft said in a statement on Tuesday. . “We want people to have more access to games, not less.”

Activision Blizzard CEO Bobby Kotick said in an email to employees Tuesday that global competition in the video game industry makes it “understandable that regulators are trying to better understand the gaming business.” But he said the “process is proceeding as expected” and he expects the deal to close in June.

“We will continue to cooperate with the European Commission where, in the countries they represent, we have many employees,” Kotick wrote.

He highlighted Brazil’s recent approval, saying the country’s competition authority understood that “we operate in a highly dynamic and competitive industry, and that the merger will not harm competition in any way.”

Saudi Arabia has also signed the deal but is still awaiting major decisions from the US Federal Trade Commission and UK and EU authorities.

Tuesday’s decision was another example of how the EU has led the way in regulating Big Tech companies, opening antitrust investigations, enacting tough data privacy regulations and pushing through landmark rules that threaten online platforms with thousands of millions in fines unless they respect fair market conditions and break down harmful content like hate speech and misinformation.

Regulators may impose conditions in the games deal that force Microsoft to keep access to Call of Duty open longer and ensure rivals don’t get an inferior version.

Among those listening to Sony’s concerns are UK antitrust regulators. Last month, they stepped up their investigation into whether Microsoft could make Call of Duty and other titles exclusive to its Xbox platform or “degrade access for rivals” by delaying releases or imposing license price increases.

“These titles require thousands of game developers and several years to complete, and there are very few other games of similar caliber or popularity,” according to a September report from the UK Competition and Markets Authority.

O’Brien reported from Providence, Rhode Island.

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