EU opens in-depth investigation into Microsoft's planned $69B acquisition of Activision (update)

David Ramos

The European Commission said on Tuesday it was opening an in-depth investigation into Microsoft's (NASDAQ:MSFT) planned $69B acquisition of Activision Blizzard (NASDAQ:ATVI) on fears that the deal may "significantly reduce competition."

In a statement, the Commission said concerns have cropped up that the deal would lessen competition in a number of markets, including console and PC games, subscription and cloud game streaming services, as well as for PC operating systems.

"In particular, the Commission is concerned that, by acquiring Activision Blizzard, Microsoft may foreclose access to Activision Blizzard's console and PC video games, especially to high-profile and highly successful games (so-called ‘AAA' games) such as Call of Duty," the statement read.

The announcement comes as no surprise, as the deadline to open an in-depth investigation was today.

In a letter to employees on Tuesday, Activision Blizzard (ATVI) CEO Bobby Kotick said the company would continue to work with the European Commission, as well as work with Microsoft (MSFT) to engage with regulators in other countries as they perform their reviews.

On Monday, Kotick said the sale remains on track to close in the quarter ending in June.

"We continue to expect that our transaction will close in Microsoft’s current fiscal year ending June 2023," Kotick said in a statement in conjunction with the video game maker's third-quarter results.

Microsoft (MSFT) shares rose 1.5% in early Tuesday trading, while Activision Blizzard (ATVI) rose nearly 1.8% to $72.36, well below the $95-per-share cash offer from Microsoft.

Separately on Tuesday, Take-Two Interactive (TTWO) CEO Strauss Zelnick said he had no issues with the Microsoft's (MSFT) planned $69B purchase of Activision (ATVI) and that most of his competitors feel the same way.

Comments

[GregJuan]

It's awesome that everyone knows that this is all about as many "commissions" getting their palms greased as possible... The deal will go through, its just a matter of how many corrupt hands need to be paid...

[Scotts Miracle-Gro Sucks]

A regulator from the EU regulatory department tweeted this morning that he won’t let MSFT take away his access to COD on PlayStation. The corruption inside all government agencies has no limits now a days. What a broken world we have become.

[Martin Keck]

@DonroldDrumpf access to old games would be a low hurdle for the merger.

[combatcorpsmanVN]

Well, we can all take solace in knowing that the EU always sees issues with every company that successfully grows its business in the face of deeply embedded anti-capitalist bias. EU hates the thought of an American company that shows these bureaucrats how to run a business that actually helps the population work in Europe.

Initiating a complete fiasco about MSFT's acquisition because the bureaucrats have nothing else to do after breakfast. Have faith though, after six months of chasing their tails, they'll give up and say that Microsoft conduct won't change western civilization and approve the transaction.

No wonder England is broke while Germany and France are whining to Yellen to tell Powell to quit fighting inflation that is bankrupting the aforementioned.

[TheHarlequin]

@combatcorpsmanVN do you recall the Vogans from Hitchhikers Guide to the Galaxy? In some way the EU is similar. Bureaucracy is what the EU excels at and you must let them complete their paperwork, have lots of meetings and arguments, approve the application with the correct rubber stamp and then file it in the right folder; otherwise their brains will explode. In the meantime Microsoft’s lawyers will just have to sit in a waiting room and drink coffee.

[bluescorpion0]

@TheHarlequin you know very little of Europe. I have had far less red tape in europe than in USA or Canada.

[TheHarlequin]

@scorpionblue I ran a European private equity fund so I guess I don’t know anything about European bureaucracy and red tape

[Julian Beatty]

lol I told you guys. This is not going through. See my comment history for why. Short acti

[Harm Hoeksema]

@Julian Beatty I found the comment I think. But first, you're one cynical guy. And you're still young and in university? The work place will not be kind to you.
Are you postive on any company at all?

Comment on merger:
Unbelievable people actually think this is going to close.
Is it an absolute monopoly? No. Is it monopolistic? Every single one of these ‘experts’ failed their history 101 courses. Hard.
Seriously. I have the retort none of these laughable “but it’s fine” arguments can counter.
Standard. Freaking. Oil.
Standard Oil was, without question, a monopoly. Which was built on - you guessed it kiddos - vertical integration. They started with oil, because, duh. Oil. They then bought up smaller, competing refineries - but not nearly all of them, or even their largest competitors. They just bought good, productive companies.
Then they bought or developed companies to package, commoditize, market, and sell the oil. And as these companies grew to control the market, they simply stopped refusing to sell anyone else’s products. And Standard Oil refused to sell the raw materials to anyone but these vertical integrations.
Transporting the oil from the well to the loading station, that was a problem. One they didn’t want to pay someone else to handle, because there was money to be made. So they started building pipelines. Pipelines aren’t oil drilling or selling! Yep, vertical integration.
->More

[Harm Hoeksema]

@Harm Hoeksema so there were more arguments on windows OS and such.

The big argument you're not seeing is: Steam
Which controls 90%+ market share of pc gaming I think - so you're whole argument is irrelevant. Software is luckily still independent of OS. Also, games can easily be created and distributed which you can see in recent Indie game successes.

[bluescorpion0]

@Julian Beatty it is expensive to take a view. either way. the best course of action when you are "sure" about something is to avoid it, not short or long it. I am always paranoid to be sure of anything.

[johnxgxholgate]

I looked at all of Msft and actin’s peers. None are European. So what’s the problem?

[Hallvar Sande]

@johnxgxholgate They only want money in exchange for their power. I'm European, it's their fucking socialist job.

[bluescorpion0]

guys relax. they're no worse than the FTC. also they got a real war going so maybe call of duty isnt so important?

[User 56360468]

In the first 60 days, EU staff will be looking in depth at the issues surrounding video game monopolies, including extensive playing of Call of Duty: Modern Warfare II, to get to the bottom of it all

[anil92691]

What is SEC’s excuse for not giving the go ahead?
National Security?
No donations to Democracy?

[desicon]

EU is just a bunch of bureaucrats. They sit and do investigation. EU economy is pretty much gone socialist, very little innovation is coming out of that economy. People have been reduced to become dependent on government scraps, which constantly diminishes in the name of global good nonsense such as "Global Warming", guilting "gluttony", and needless war with Russia.

In America woke mob almost beat the population to subscribe to EU nonsense. Hope today's election soundly rejects the centralized model of governing, usurp of power with cockamamie ideas.

[tranche1]

Cold winter in Europe. They need to divert electricity use from gaming to space heaters.

[dimi1234]

@tranche1 actually it's been super warm and gas prices are tumbling.

[anil92691]

@dimi1234
They will tumble totally by January 15 when gas will no longer be available for use. Total solar heating. Feel for the animals who will warm people.

Ukraine War; a green climate success.

[Scotts Miracle-Gro Sucks]

Eu just copy and pasted what Sony provided them along with a big check

[E-Rock001]

Sony is the only company complaining.

[CoryE]

No surprise. Excessive government regulation is the only way Europe can stay economically relevant.

[SuperPac]

EU, with its bloated bureaucracy in Brussels, has all the bug-swatting wastrels to ''open in-depth investigation'' into everything as their own inflation, currency, energy and food situation grows grim with each passing week. This is quite the ''Theatre of the Absurd''.

[MoneyPig]

The EU needs to throw the USA under the bus and expose how Bill Gates supports political propoganda via MSNBC to get favors from regulators who answer to politicians.

The fact that Buffet keeps buying ATVI says a lot about the relationship between poltical corruption and the news media.

[Blowback2]

@MoneyPig great LSD in your neck of the woods…..

[Elons Mum]

@MoneyPig your tin hat is getting a bit tight. Time for a bigger one.

[Born'nRaised]

The EU looking for its lb. of flesh...how pathetic are politicians...

[Nescience]

Just incredible.

You’d think the entire EU would be laser focused, all hands on deck, toward achieving solutions for its imminent energy catastrophe.

But no. They’re focused on VIDEO GAMES, what they grotesquely term “competition,” and blatant extortion.

[Martin Keck]

@Nescience the EU has specialized personnel. The competition watchdogs are not experts for the world market prices of natural gas or oil. I would be surprised if the commission heads were micro managing video games markets, because there are larger problems - like you said.

[Hokiefan_CT]

@Nescience Maybe those regulators should be out in the woods cutting firewood and picking up sticks.

[User 31614085]

aka "Shakedown"