UK blocks Microsoft’s $69bn Activision Blizzard takeover
Britain blocked Microsoft's $69 billion acquisition of US video game behemoth Activision Blizzard on Wednesday, arguing that it would harm competition in cloud gaming and put the megadeal in jeopardy.
In a long-running investigation, the UK's Competition and Markets Authority ruled against the merger "out of concern that it would alter the future of the rapidly expanding cloud gaming market, resulting in less innovation and fewer options for UK gamers in the years to come."
Microsoft responded that it would appeal the ruling regarding its massive acquisition, which has not yet received regulatory sanction in Europe or the United States.
The Xbox-owner launched in 2022 its bid to establish the world's third largest gaming company by revenue with the acquisition of Activision, owner of the hit games "Candy Crush" and "Call Of Duty", sparking antitrust concerns worldwide.
Wednesday, the CMA added that Microsoft's proposed remedies for cloud gaming contained "significant shortcomings" and would necessitate additional regulatory supervision, as opposed to letting the market decide.
"Preventing the merger would effectively allow market forces to continue to operate and shape the development of cloud gaming without this regulatory intervention," the statement continued.
Martin Coleman, the chairman of the independent panel of experts undertaking the CMA investigation, stated that the deal would have given Microsoft even more influence over its competitors.
"Microsoft already enjoys a powerful position and head start over other competitors in cloud gaming, and this deal would strengthen that advantage, giving it the ability to undermine innovative new competitors," Coleman said.
"Microsoft engaged with us in a constructive manner to address these concerns, for which we are grateful, but their proposals were ineffective and would have replaced competition with ineffective regulation in a new and dynamic market."
The announcement comes one month after the CMA limited the scope of its investigation to cloud gaming, having determined that Microsoft's deal would not harm competition in console gaming.
However, the company argued on Wednesday that the video game industry required competition to flourish.
Coleman added, "Cloud gaming requires a free, competitive market to drive innovation and choice."
This can be accomplished most effectively by allowing the current competitive dynamics in cloud gaming to continue to operate.
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