Microsoft’s proposed acquisition of video game maker, Activision Blizzard, for $69 billion has been blocked by British regulators over concerns that it could stifle competition in the cloud gaming market. In its final report, the Competition and Markets Authority stated that “the only effective remedy” to prevent a significant loss of competition resulting from the deal would be to prohibit the merger. This deal, which would have been the biggest in tech industry history, is also being scrutinized by regulators in the US and Europe amid concerns that it would give Microsoft control of popular game franchises like Call of Duty.
Microsoft has expressed disappointment at the decision and intends to appeal it. The company signaled that it remains fully committed to the acquisition, and that the decision by the UK watchdog “rejects a pragmatic path to address competition concerns” while discouraging tech innovation and investment in the UK. President Brad Smith stated that he is particularly disappointed that the decision appears to reflect a flawed understanding of the market and relevant cloud technology.
Activision also expressed its intention to reverse the decision on appeal and vowed to work aggressively with Microsoft to achieve that goal. The news has drawn mixed reactions, with some observers suggesting that the decision is a clear indication of regulators’ determination to ensure that competition in the tech industry is preserved. Others have argued that the decision will hurt the UK’s economy by discouraging investment in the country’s tech industry.