The European Union is taking a closer look at Microsoft’s proposed $68.7 billion purchase of video game giant Activision Blizzard, citing concerns the deal could hurt competition in the video game industry.

A preliminary review of the deal found that Microsoft (MSFT) could try to withhold the games it’s acquiring from other distributors, according to an EU press release. The proposed acquisition would see Microsoft (MSFT) become the world’s third-largest video game publisher, controlling popular franchises such as “Call of Duty” and “World of Warcraft.”

“Such foreclosure strategies could reduce competition in the markets for the distribution of console and PC video games, leading to higher prices, lower quality and less innovation for console game distributors, which may in turn be passed on to consumers,” the EU said.

The deeper-level probe, which could run through March of next year, is also driven by fears the acquisition could consolidate power in Microsoft’s Windows operating system at the expense of competition, if Microsoft attempts to make its PC games exclusive to Windows.

And, according to an EU press release, authorities are concerned the deal may allow Microsoft to concentrate power in its own cloud gaming service and prevent rival cloud services from gaining access to Activision (ATVI) games.

In September, the United Kingdom announced it had opened a second-stage investigation into the proposed deal.

“We’re continuing to work with the European Commission on next steps and to address any valid marketplace concerns,” a Microsoft spokesperson told CNN in a statement. “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.”

Source: http://edition.cnn.com

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