Sources told Politico (opens in new tab) that the European Commission will launch an in-depth "Phase 2" investigation into Microsoft's $68 billion acquisition of Activision Blizzard. The Commission will launch the investigation after Microsoft declined to submit a remedy (a commitment to satisfy the Commission's concerns about the deal) by tonight's midnight deadline.

Like the Brazilian market regulator (opens in new tab) and the UK market regulator (opens in new tab), the Commission's problem is that Microsoft's ownership of Activision has led Microsoft to claim that the Call of Duty series will remain on PlayStation (opens in new tab) (open in new tab), despite repeated claims that it would keep it on PlayStation (open in new tab), largely due to concerns that competitors would lose access to Call of Duty (specifically, that Sony would lose access to Call of Duty).

Politico also reports that the European Commission has been inquiring with rivals about Microsoft's cloud services, which is much discussed in Microsoft's recent filing with the UK Competition and Markets Authority (CMA) (opens in new tab).

Perhaps not the reaction Microsoft was expecting from the European Commission. While the company no doubt hopes that all countries will let the deal pass easily, as Saudi Arabia did (opens in new tab), it appears that Microsoft's lawyers will have to write lengthy submissions to European regulators, as they did for the UK.

On the plus side (at least for us), Microsoft's submission to the UK CMA reveals a variety of interesting information was revealed. We also learned that Microsoft is not as bullish about cloud gaming (opens in new tab) as it is about talking about it on stage at the gaming convention, and that the company thinks we should stop worrying about Call of Duty exclusivity. [If indeed Microsoft fails to meet tonight's deadline for filing remedies, the Commission will announce a full investigation into the acquisition by November 8. And we would expect further clarifying documents to be filed after that.