(Bloomberg) — The proposed $69 billion acquisition by Microsoft Corp. from game developer Activision Blizzard Inc. is facing an in-depth investigation by the European Union after regulators said they were concerned the software giant could block access to blockbuster franchises such as Call of Duty. .
The European Commission said in a statement on Tuesday that Microsoft can “exclude access to Activision Blizzard’s console and PC video games, especially blockbuster and blockbuster games.” The EU’s merger watchdog set March 23 as the deadline for its so-called Phase 2 investigation.
The combination with Activision, which owns some of the most popular games including World of Warcraft and Guitar Hero, would make Microsoft the world’s third-largest gaming company and boost the Xbox maker’s list of titles for its Game Pass subscribers .
But the deal already faces prolonged scrutiny from antitrust agencies around the world. Microsoft last month accused the UK’s Competition and Markets Authority of relying on “self-serving” input from rival Sony Group Corp. in their deliberations. The U.S. Federal Trade Commission is also reviewing the transaction, including how it may affect workers.
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Microsoft said in a statement that it will work with the EU to resolve any “valid” market issues. “Sony, as an industry leader, says it’s concerned about Call of Duty, but we’ve said we’re committed to making the same game available on the same day on both Xbox and PlayStation,” the company added.
Activision CEO Bobby Kotick said in a letter to employees that the company is working “cooperatively with regulators in other jurisdictions and the process is moving forward as we had hoped.” He added that he expects the deal to close in Microsoft’s current fiscal year, which ends next June.
Last month, the EU asked video game developers, publishers, distributors, competing operating systems and cloud service providers about the potential negative effects of the deal.
EU regulators said on Tuesday that their preliminary investigation showed that the deal could “significantly reduce competition in the distribution markets for console and PC video games”, including multi-game subscription services, of cloud game streaming and PC operating systems.
The deal could give Microsoft “the ability, as well as a potential economic incentive, to engage in foreclosure strategies” with rival distributors of console video games, the EU watchdog said. The commission said it sees the same risk for rival PC operating system vendors.
(Updates with Activision’s comment in the sixth paragraph)
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