The executive arm of the EU, the European Commission, is reportedly preparing to object to Microsoft’s proposed $68 billion acquisition of Activision Blizzard. This news is just the latest in a series of regulatory obstacles that the tech giant has faced as it seeks to acquire Activision Blizzard.
The Commission began investigating the deal in November and has yet to publish its preliminary findings. However, sources close to Brussels have reported that the EC’s antitrust body is preparing a statement of objections outlining its concerns about the proposed deal. This statement of objection is a non-binding form of correspondence in the EC’s antitrust review process, and it allows the reviewed parties ample time to offer up concessions and avoid an official antitrust challenge altogether. However, it should be noted that a statement of objections is a serious indication that the European Commission has concerns about the merger and it is likely to be a significant hurdle for Microsoft to overcome.
This report comes as Microsoft’s proposed takeover is already facing regulatory opposition in its home country, the United States. The U.S. Federal Trade Commission sued to block the merger on antitrust grounds in December and Microsoft promptly published a 37-page response arguing that the FTC’s lawsuit is violating the company’s constitutional protections, including its right to due process guaranteed by the Fifth Amendment. The EU has also contradicted a key FTC claim about the Activision Blizzard acquisition even before Microsoft officially responded to that lawsuit.
Despite these regulatory obstacles, Microsoft is still expecting to complete the Activision Blizzard acquisition in mid-2023 and has repeatedly stated as much. The proposed merger has already won approval in countries like Brazil, Chile, Saudi Arabia, and Serbia. However, the FTC’s lawsuit and the potential statement of objections from the EU’s executive arm are significant hurdles that Microsoft will have to overcome in order to complete its takeover of Activision Blizzard.
Apart from the EU, the acquisition is also being reviewed by the UK Competition and Markets Authority. The CMA is expected to provide Microsoft with its preliminary findings in mid-February. With the EU, FTC, and the UK Competition and Markets Authority all reviewing the acquisition, it is likely that Microsoft will face a significant amount of scrutiny before the acquisition can be completed. Given all these hurdles Microsoft is still confident that it will be closing this deal by the middle of this year.
