U.K. blocks Microsoft’s Activision deal over competition fears

Microsoft said it was disappointed and signalled it wasn't ready to give up

British regulators have blocked Microsoft’s $69 billion deal to buy video game maker Activision Blizzard. File | Photo Credit: Reuters

British regulators have blocked Microsoft's $69 billion deal to buy video game maker Activision Blizzard over worries that it would stifle competition in the cloud gaming market.

The Competition and Markets Authority said in its final report on April 26 that “the only effective remedy” to the significant loss of competition that the deal would result in “is to prohibit the Merger.”

The all-cash deal was set to be the biggest in the history of the tech industry.

But it faces stiff opposition from rival Sony and is also being scrutinised by regulators in the U.S. and Europe over fears that it would give Microsoft control of popular game franchises like Call of Duty.

Microsoft said it was disappointed and signalled it wasn't ready to give up.

“We remain fully committed to this acquisition and will appeal,” President Brad Smith said in a statement. He said the U.K. watchdog's decision “rejects a pragmatic path to address competition concerns" and discourages tech innovation and investment in the United Kingdom.

“We're especially disappointed that after lengthy deliberations, this decision appears to reflect a flawed understanding of this market and the way the relevant cloud technology actually works,” Mr. Smith said.

Activision also fired back, saying it would "work aggressively with Microsoft to reverse this on appeal."