Shulou(Shulou.com)11/24 Report--

On Tuesday, local time, the European Commission announced an in-depth investigation into Microsoft's planned $69 billion acquisition of video game giant Activision Blizzard because they were concerned that Microsoft's acquisition could affect franchises for popular games such as call of Duty.

Microsoft first announced its acquisition of Activision Blizzard in January. So far, Saudi and Brazilian regulators have approved the deal, but antitrust regulators in the US, Europe and elsewhere have yet to make a decision. If approved, the all-cash acquisition would be the largest and most expensive deal in the history of the technology industry.

In a statement, the European Commission outlined what prompted it to conduct an in-depth investigation into the deal, which it believes could reduce competition in the video games and console distribution markets. The European Commission also pointed to potential problems surrounding the PC market, arguing that the deal could "prevent users from buying non-Windows PCs".

"the key is to ensure that the gaming ecosystem remains dynamic for the benefit of users in this fast-growing industry," the European Commission said in a statement on Tuesday. "We must ensure that there are still opportunities for future and existing PC, console video game distributors and PC operating system competitors." The agency needs to decide whether to approve the deal by March 23, 2023.

At the heart of the debate over the deal is who will control the future release of Activision Blizzard, especially the first-person shooter call of Duty. Activision Blizzard said this week that its latest version of call of Duty: modern Warfare 2 has earned more than $1 billion since its launch on October 28.

Sony, Microsoft's console competitor and maker of PlayStation, has expressed concern to regulators around the world about the loss of so-called "must-have" game franchises. In response, Microsoft promised to retain the call of Duty on PlayStation for at least a few years on the basis of its current contract with Sony. At the same time, Microsoft said it might offer the game on the Nintendo Switch. Currently, people can't play the game on Switch.

In a preliminary investigation, the EU found possible antitrust problems with the deal, particularly with regard to the distribution of video games and preventing Microsoft competitors from obtaining franchises. The agency said it was "concerned that the proposed acquisition could reduce competition in the PC operating system market".

Microsoft argued that it would continue to cooperate with the European Commission's investigation "and address any legitimate market concerns". "as an industry leader, Sony has expressed concern about the call of Duty franchise, but we have made it clear that we are committed to launching the game on both Xbox and PlayStation," Microsoft said in a statement on Tuesday. "We want people to have more access to the game, not less."

Activision Blizzard CEO Bobby Bobby Kotick wrote in an email to employees on Tuesday that global competition in the video game industry is understandable for regulators to try to better understand the gaming business. But he said it was "going as we expected" and expected the deal to be completed by June next year.

"We will continue to work with the European Commission and we have a lot of employees in the countries they represent," Kotick wrote. We have been working closely with Microsoft to actively engage with regulators in other key countries to answer their questions and provide them with information to assist them in their review. People from all our business and functional departments are involved in this work. "

The deal was recently approved by Brazilian regulators, who said the country's anti-competition regulators had learned that "we are operating in a highly active and competitive industry and the merger will not harm competition in any way". Saudi regulators have also approved the deal, but are still awaiting approval from the US Federal Trade Commission (FTC) and relevant UK and EU agencies.

Tuesday's decision by the European Commission shows that the agency has once again taken the lead in regulating large technology companies, launching antitrust investigations, imposing strict regulation on data privacy and promoting the passage of landmark regulatory rules. The rules threaten online platforms to face billions of dollars in fines unless they respect fair market conditions and crack down on harmful content such as hate speech and false information.

Regulators are likely to impose restrictions on the deal, forcing Microsoft to open its franchise to call of Duty for a longer period of time and ensuring that its competitors do not just get lower versions of the game.

Last month, the Competition and Market Authority also escalated its investigation into whether Microsoft could give exclusive access to call of Duty and other games to its Xbox platform, or "otherwise reduce the rights of competitors" by delaying the release or raising license prices. According to a report released by the agency, these games will take thousands of game developers and several years to complete, and there are few other games of similar level or popularity.

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