The European Union's executive arm is likely to object to Microsoft's proposed acquisition of Activision Blizzard, according to a new report. The European Commission started investigating the $68 billion deal in early November, but has yet to publish its preliminary findings.
Microsoft's proposed takeover of Activision Blizzard is already facing regulatory opposition in its home country, where the U.S. Federal Trade Commission sued to block the merger on antitrust grounds in December. The tech giant's legal counsel 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.
And while the EU actually contradicted a key FTC claim about the Activision Blizzard acquisition even before Microsoft officially responded to that lawsuit, the European Commission is now also expected to challenge the merger, Reuters reports, citing sources close to Brussels. Namely, the EC's antitrust body is said to be preparing a statement of objections outlining its concerns about the proposed deal. The regulator is likely to present its findings to both Microsoft and the public in the coming weeks, as per the same report. While the exact timeline of its administrative response remains unclear, the watchdog previously committed to concluding its initial probe of the deal by April 11.
A statement of objections represents non-binding, informative correspondence in the EC's antitrust review process. It is a way for European regulators to voice their concerns about a particular deal without committing to a lawsuit, allowing the reviewed parties ample time to offer up concessions and avoid an official antitrust challenge altogether. According to one previous report, Microsoft was already preparing an EU concession package back in November, but the Commission is understood to be unwilling to discuss antitrust remedies before publicly outlining its concerns about the merger.
In the grand scheme of things, Microsoft is still expecting to complete the Activision Blizzard acquisition in mid-2023 and has repeatedly stated as much. Its proposed merger already won approvals in Brazil, Chile, Saudi Arabia, and Serbia. And regardless of this newly reported statement of objections from the EU's executive arm, the FTC's lawsuit remains the biggest regulatory obstacle that Microsoft will have to overcome in order to complete its takeover of the Santa Monica, California-based gaming giant.
Apart from the EU, the acquisition is currently also being reviewed by the UK Competition and Markets Authority. The CMA is expected to provide Microsoft with its preliminary findings in mid-February.
Source: Reuters