The EU Commission Is About To Put Microsoft’s Activision Deal Under A Lot More Scrutiny

The European Commission will launch a more in-depth probe of Microsoft’s proposed acquisition of mega-publisher Activision Blizzard. According to Politico, the move comes after the tech giant failed to provide remedies to antitrust enforcers.

Microsoft’s deadline to submit the remedies was midnight on October 31st, GMT. Because it failed to do so, the Commission will now move to further scrutinise the deal. According to Politico’s sources, both of whom chose to remain anonymous, Microsoft’s missing the deadline was a choice, not an error.

This means there’s now a new deadline of November 8, by which the European Commission needs to formalise any intention to launch the next phase of its investigation.

The Commission’s recent lines of questioning have seen Microsoft defending aspects of its Cloud Gaming platform, and fending off concerns from rival PlayStation that its acquisition could affect sales of cash cow franchise Call of Duty on competing platforms.

This will be the second time the EU Commission has increased the intensity of its questioning, having done so once in September after both Microsoft and PlayStation’s Call of Duty stalemate erupted into a public war of words.

The EU is not the only territory investigating the deal either. Other countries currently scrutinising the deal include Australia, New Zealand, Japan, South Korea, and the US. Saudi Arabia and Brazil have both approved the deal, the latter without condition.

What does this mean for Microsoft?

The short (and entirely outside-looking-in) answer is: the squeeze is on. If Microsoft intends to bring Activision Blizzard under its roof as a single entity, it seems like it’s currently going the right way for a smacked bottom. My assumption is that Microsoft is well aware that absorbing Activision Blizzard as a single entity will be very difficult. Presenting the acquisition in its entirety was probably an exercise in seeing exactly what it could get away with.

With the parameters now established, and with regulators in other countries likely to look to the EU Commission’s findings for precedent, I would imagine Microsoft will now prepare for an outcome where it needs to break Activision Blizzard up into smaller companies it can absorb, dissolve, or sell off. At this point, for Microsoft, my feeling is that the game has become more about fights it can win than fighting a battle it knows it will probably lose.