Microsoft's $69 billion Activision takeover faces competition probe in the UK

The U.K.'s competition watchdog on Wednesday opened an investigation into Microsoft's proposed acquisition of video game publisher Activision Blizzard.

In a statement, the U.K.'s Competition and Markets Authority said its investigation would consider whether the deal may harm competition — "for example, through higher prices, lower quality, or reduced choice."

The CMA set a Sept. 1 deadline for its initial decision. The regulator said it wants feedback from interested third parties, with a consultation running until July 20.

Lisa Tanzi, Microsoft's corporate vice president and general counsel, said regulatory scrutiny of the deal was to be expected, adding the company would "fully cooperate" with the CMA.

"We're committed to answering questions from regulators and ultimately believe a thorough review will help the deal close with broad confidence, and that it will be positive for competition," Tanzi said.

"We remain confident the deal will close in fiscal year 2023 as initially anticipated."

Activision was not immediately available for comment when contacted by CNBC.

Shares of Microsoft and Activision barely moved on the news Wednesday.

While it's still early days, the probe is another sign of the U.K.'s ambition to become a global player in the race to rein in Big Tech. Earlier Wednesday, the CMA said it was investigating Amazon over the e-commerce giant's use of data from third-party sellers.

Antitrust enforcers around the world are gearing up to review the $68.7 billion Activision-Microsoft deal, which was announced in January. Federal Trade Commission Chair Lina Khan has said the U.S. watchdog is looking into the transaction, while the Australian competition regulator is also reviewing it.

If approved, the acquisition would have huge implications for the $190 billion video game industry, handing control of incredibly lucrative franchises including Call of Duty, Candy Crush and Warcraft to one of the world's biggest tech companies.

Microsoft hopes the purchase will help it in the race to build the so-called metaverse, a hypothetical network of large virtual worlds. Various other companies are vying for a role in the space, including Facebook parent company Meta and Sony.

However, analysts are skeptical about the chances of a deal being approved by regulators.

Through its Xbox division, Microsoft is one of the largest game console manufacturers, sitting alongside industry juggernauts like Sony and Nintendo. The company has sought to grow its hoard of first-party content, having previously acquired Bethesda, the studio behind popular game series like The Elder Scrolls and Doom, for $7.5 billion.

Meanwhile, Activision has been beset by numerous internal issues in the past year, including accusations of sexual harassment, unionization efforts and walkouts from staff. Employees at the company are deeply unhappy with management and have called on CEO Bobby Kotick to resign. Microsoft previously said Kotick will stay on as CEO of Activision until after the deal closes.