LONDON: The European Commission said it would scrutinise British proposals for tax breaks for video games developers because it was not clear that taxpayers should subsidise the industry.
The 25 percent tax relief, which was announced by finance minister George Osborne in 2012, was part of a government initiative to build Britain's technology base.
The Commission said on Tuesday that it would launch an in-depth investigation into the proposal, saying it doubted that the aid was necessary.
"The market for developing video games is dynamic and commercially promising," said Joaquin Almunia, vice-president for competition policy.
"It is not clear whether the taxpayer should be subsidising this activity. Such subsidies could even distort competition."
The scheme, which also covers the animation and high-end TV production facilities, is on similar lines to a film tax credit, which Osborne had said helped generate more than 1 billion pounds ($1.5 billion) of film production investment in 2011.
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