Microsoft’s quest to acquire Activision Blizzard may have struck another stumbling block.
This was revealed following report that the European Commission is considering issuing an antitrust warning to Microsoft to block the deal in its current form.
According to sources, the EU’s competition authority is preparing a ‘statement of objections’ outlining its objections to the agreement, which it will send to Microsoft in the coming weeks.
The European Commission opened an in-depth probe into the deal in November, stating it was concerned that the proposed deal could stifle competition for the distribution of console and PC video games and for PC operating systems. That would include ‘multi-game subscription services and/or cloud game streaming services.’
The regulator said it was particularly worried that Microsoft could restrict access to Activision Blizzard’s console and PC games, especially popular, high-profile AAA titles like Call of Duty.
Microsoft was earlier expected to provide remedies to the European Commission in an effort to avoid a statement of objections and expedite the regulatory procedure.
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However, the Commission is unlikely to be open to remedies without first releasing its charge sheet, Reuters’ sources said, adding that both parties are informally discussing concessions.
The EU antitrust regulator has set an April 11 deadline for a judgement on the deal, after which Microsoft will be asked to address issues and appeal the objections.
“We’re continuing to work with the European Commission to address any marketplace concerns,” a Microsoft spokesperson said.
“Our goal is to bring more games to more people, and this deal will further that goal.”
Microsoft announced plans to acquire Activision Blizzard in a $68.7 billion (£50.5 billion) all-cash deal last year. The move is intended to help Microsoft grow its gaming business across PCs, mobile and consoles, as well as lay the building blocks for its metaverse efforts.
The Windows-maker has enormous budgets and aggressive ambitions. It owns 23 gaming studios, including Bethesda – creator of Fallout and Skyrim – and Mojang, the studio behind Minecraft.
Opinions on the deal are split around the world.
In December, the USA’s Federal Trade Commission (FTC) launched an antitrust lawsuit against Microsoft in an effort to scuttle the deal.
The FTC said the acquisition would allow Microsoft to stifle competition for its Xbox videogame systems and its subscription gaming business.
The FTC has now announced a schedule setting the dates for final hearings before an administrative law judge, which will start on 2nd August.
Microsoft rival Sony, maker of Playstation, calls the deal “bad for competition, bad for the gaming industry, and bad for gamers themselves”.
Meanwhile Brazil, Saudi Arabia and Serbia have given their blessings to the deal without any restrictions.
Last month Microsoft and Nintendo agreed last month to a 10-year arrangement to publish Call of Duty on Nintendo platforms. Microsoft President Brad Smith said Sony had the same offer if it was willing to “sit down and talk”.