The United Kingdom’s antitrust regulator blocked Microsoft’s acquisition of one of the world’s largest video game developers, a major win for antitrust enforcers.
The U.K. Competition and Markets Authority announced on Wednesday that it was blocking Microsoft’s $68.7 billion purchase of Activision Blizzard. The regulator said the purchase would give Microsoft a monopoly over cloud-based gaming, or games played over the internet.
The block coincides with a Federal Trade Commission lawsuit to stop the deal. The European Union is also threatening to launch an antitrust probe into the company over the deal.
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“Cloud gaming needs a free, competitive market to drive innovation and choice. That is best achieved by allowing the current competitive dynamics in cloud gaming to continue to do their job,” Martin Coleman, the CMA investigator overseeing the case, said in a statement.
“Alongside Microsoft, we can and will contest this decision, and we’ve already begun the work to appeal to the U.K. Competition Appeals Tribunal,” Activision Blizzard CEO Bobby Kotick said in a statement.
“This decision appears to reflect a flawed understanding of the market and how the relevant cloud technology actually works,” Microsoft President Brad Smith said.
Microsoft offered to buy Activision Blizzard in January 2022, only for it to be blocked by the FTC in December 2022 over an alleged monopoly involving Xbox Game Pass. “Microsoft has already shown that it can and will withhold content from its gaming rivals,” said Holly Vedova, director of the FTC’s Bureau of Competition. “Today, we seek to stop Microsoft from gaining control over a leading independent game studio and using it to harm competition in multiple dynamic and fast-growing gaming markets.”
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It’s unclear how the U.K. decision will affect the FTC’s suit. The decision contrasts the Lina Khan-led agency’s recent court loss, in which it failed to block Facebook parent company Meta’s acquisition of the virtual reality developer Within.
