The European Commission has opened an in-depth investigation into Microsoft’s proposed $68.7bn (£59.5bn) acquisition of Call of Duty maker Activision Blizzard.
The commission said it was concerned that the proposed deal may reduce competition in the market.
A preliminary investigation found that the transaction may significantly reduce competition, including multi-game subscription services and cloud game streaming services, and for PC operating systems.
The regulatory said the US tech giant may block access to Activision Blizzard’s console and PC video games, especially to high-profile and highly successful games such as ‘Call of Duty’.
The concern here is that this could lead to higher prices, lower quality and less innovation for console game distributors, which may in turn be passed on to consumers.
The Activision deal, which was announced on January 18, includes iconic franchises, including Warcraft and Candy Crush, as well as its global eSports activities through Major League Gaming.
If the deal is a success, it would make Microsoft the third-largest gaming company by revenue, just behind Tencent and Sony.
The EU’s executive vice-president in charge on competition policy Margrethe Vestager said the point of the probe was to “ensure that the gaming ecosystem remains vibrant to the benefit of users in a sector that is evolving at a fast pace”. She said there would be a probe into how the deal impacts the supply chain.
The UK competition regulator also referred Microsoft’s snap up of the gaming giant for an in-depth investigation.
The Competition and Markets Authority (CMA) said in September that it has referred the takeover for a ‘phase two’ probe after Microsoft said it would not be offering any proposals to address the regulator’s concerns.
A Microsoft spokesperson said: “We’re continuing to work 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. We want people to have more access to games, not less.”
Activision were not immediately available for comment.