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Britain’s antitrust watchdog said on Wednesday it had opened an investigation into Microsoft’s $68.7 billion (Rs 5,41.35 crore) acquisition of “Call of Duty” maker Activision Blizzard.

The Competition and Markets Authority (CMA) said it had until September 1 to make a first-stage decision on whether a deal the US technology company and video game maker Activision would reduce competition in the UK.

A Phase 1 investigation by the will either result in the approval of the transaction, or it will proceed to a more in-depth Phase 2 investigation.

Neither Microsoft nor Activision immediately responded to Reuters’ requests for comment.

In the largest gaming industry deal in history, Microsoft said in January that it would acquire Activision Blizzard. The Microsoft-Activision deal would be the largest all-cash acquisition ever, according to Refinitiv data. The Redmond-based software giant said the deal would make it the third-largest gaming company in the world by revenue, after Tencent and Sony.

The deal is subject to customary closing conditions, completion of regulatory review and approval by Activision Blizzard shareholders, Microsoft said. The transaction is expected to close in fiscal 2023. Activision Blizzard and Microsoft Gaming will continue to operate independently until this transaction closes.

Demand for video games has surged during the pandemic, as consumers stuck at home played more games to entertain themselves. Activision’s library of games like Call of Duty and Overwatch also give Microsoft’s Xbox gaming platform an edge over Sony’s PlayStation, which has enjoyed a steady stream of exclusive games for years.

Back in April, Activision Blizzard said that starting July 1, nearly 1,100 U.S. temporary and casual quality assurance staff in some divisions would transition to full-time employment. The company said it would raise the minimum hourly wages of these employees – from Activision Publishing and Blizzard units – to $20 (about Rs 1,520) or more and also offer them access to full company benefits, making Activision Publishing’s The total number of full-time employees increased by 25%.

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By Rebecca French

Rebecca French writes books about Technology and smartwatches. Her books have received starred reviews in Technology Shout, Publishers Weekly, Library Journal, and Booklist. She is a New York Times and a USA Today Bestseller...