EU’s Call of Duty: Probe Microsoft-Activision Blizzard deal

BRUSSELS The European Union launched an investigation into Microsoft’s proposed takeover of Activision Blizzard. They fear that the $69 trillion deal will distort fair competition to popular titles such as Call of Duty.

Microsoft, maker of the Xbox gaming system, first announced the agreement to buy the California-based game publisher in January, but it still awaits scrutiny by antitrust regulators in the U.S., Europe and elsewhere. The all-cash deal will be the largest ever in the history the tech industry.

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

“We must ensure that opportunities remain for future and existing distributors of PC and console video games, as well as for rival suppliers of PC operating systems,” the commissioners said. They have until March 2023, for approval.

The dispute centers on who will control future releases of Activision Blizzard’s most popular games, including Call of Duty, the first-person military shooter. Activision announced this week that its latest installment, Call of Duty: Modern Warfare 2, had already sold more than $1 billion since its Oct. 28 release.

Microsoft’s console rival Sony, maker of the PlayStation, has brought its concerns about losing access to what it describes as a “must-have” game title to regulators around the world. Microsoft has responded by promising to keep Call of Duty on its PlayStation for “at least several more years” beyond the current contract with Sony. It has also indicated that it may bring the game to Nintendo’s Switch console. The game is not currently available on Switch.

The EU conducted a preliminary investigation and found potential antitrust problems with the distribution of videogames and the halting of access to Microsoft’s competitors.

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

Microsoft said it will keep working with the European Commission on next steps “and to address any valid marketplace concerns.”

“Sony, as the industry leader, says it is worried about Call of Duty, but we’ve said we are committed to making the same game available on the same day on both Xbox and PlayStation,” Microsoft said in a statement 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 games business.” But he said the “process is moving along as we expected” and foresees the deal closing by June.

“We will continue our cooperation with the European Commission in countries where they represent, we have many workers,” Kotick wrote.

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

Saudi Arabia also has signed off on the deal, but it still awaits important decisions from the U.S. Federal Trade Commission and authorities in the U.K. and EU.

Tuesday’s announcement was another example of the EU’s leadership in regulating Big Tech companies. It opened antitrust investigations and enacted strict regulations on data privacy. These landmark rules threaten online platforms with billions of dollars in fines if they don’t respect fair market conditions or crack down on hate speech. It is possible that regulators could place conditions on the gaming agreement that force Microsoft to continue access to Call of Duty for a longer time and ensure that its competitors don’t get a lower version.

The United Kingdom’s antitrust regulators are also listening to Sony’s concerns. They increased their investigation into whether Microsoft could make Call of Duty, and other titles, exclusive to its Xbox platform or “otherwise reduce its access to its rivals” by delaying release or increasing licensing prices.

” These titles require thousands and many years of game development, and there are very few games of comparable popularity,” according to a September report by the U.K.’s Competition and Markets Authority.

——

O’Brien reported from Providence, Rhode Island.