Microsoft Receives EU’s List of Concerns About Activision Deal

Leah Nylen, Jillian Deutsch and Dina Bass, Bloomberg News

The Microsoft Corp. logo is displayed outside the company's main campus in Redmond, Washington, U.S., on Tuesday, Dec. 19, 2017. In the race to commercialize a new type of powerful computer, Microsoft has just pulled up to the starting line with a slick-looking set of wheels. The Redmond, Washington-based tech giant is competing with Alphabet Inc.'s Google, International Business Machines Corp. and a clutch of small, specialized companies to develop quantum computers – machines that, in theory, will be many times more powerful than existing computers by bending the laws of physics. Photographer: David Ryder/Bloomberg , Bloomberg

(Bloomberg) -- Microsoft Corp. received a formal list of concerns from the European Commission about its proposed $69 billion takeover of Activision Blizzard Inc., marking an escalation in the regulatory body’s probe of the deal.

The software giant received the statement of objections Tuesday, according to people familiar with the matter, who asked not to be identified because the proceedings are confidential. Microsoft declined to comment.

The commission is conducting an in-depth probe and has a deadline to make a decision by April 11. The statement of objections sets out potential reasons for blocking the deal if no remedies are forthcoming. Such filings are routine with big mergers and don’t necessarily indicate a transaction is headed for a veto.

When opening the in-depth investigation in November, the commission said that Microsoft may “foreclose access to Activision Blizzard’s console and PC video games, especially to high-profile and highly successful games.” A preliminary probe showed the deal could “significantly reduce competition on the markets for the distribution of console and PC video games.” That included cloud game streaming services, an area where Microsoft already leads the market.

Microsoft’s Activision takeover requires approval from 16 jurisdictions, with the US Federal Trade Commission, the UK’s Competition and Markets Authority and the European Commission representing the biggest hurdles. The FTC filed a lawsuit to block the transaction in December, saying Microsoft’s ownership of Activision could hurt other players in the $200 billion gaming market by limiting rivals’ access to the company’s biggest games.

Microsoft’s receipt of the statement was reported earlier by MLex news service.