In a major setback for tech giant Microsoft, the UK’s Competition and Markets Authority (CMA) has blocked its $75bn acquisition of video game publisher Activision Blizzard.
The decision is seen as a significant blow to Microsoft, which had hoped to expand its gaming business with Activision’s popular franchises such as Call of Duty and Candy Crush.
The CMA had expressed concerns that Microsoft’s acquisition would lead to exclusivity of Activision’s games on its own cloud gaming service, thereby impeding innovation in the nascent cloud gaming market.
The regulator’s decision has been met with criticism from both Microsoft and Activision Blizzard, with the latter calling it a “disservice to UK citizens”.
Microsoft’s Vice-Chair and President, Brad Smith, has vowed to appeal the ruling, warning that it “discourages technology innovation and investment in the United Kingdom”.
Activision Blizzard’s shares saw an 11% drop in pre-market trading following the news of the ruling.
The CMA’s decision highlights the growing concerns around the power of big tech companies and their impact on competition and innovation.
The regulator’s move is likely to have implications for other tech giants looking to acquire companies in the UK, as they may face greater scrutiny from regulators concerned about their impact on competition.
While the ruling may be a setback for Microsoft, it is a sign that regulators are taking their role in ensuring a level playing field seriously. As the digital economy continues to evolve, it is essential that regulators keep pace with these changes to ensure that competition remains fair and innovation is protected.
