UK blocks Microsoft’s Activision bid, blow to tech giant

British antitrust regulators on Wednesday blocked Microsoft’s plans to acquire video game giant Activision Blizzard for $69 billion, a significant hurdle for what would be the biggest consumer tech acquisition since AOL bought Time Warner it two decades ago.

The UK Competition and Markets Authority said in a statement that Microsoft’s proposal “has not effectively addressed the concerns of the cloud gaming industry”.

The ruling bolsters the Federal Trade Commission’s efforts to block the acquisition and is a wake-up call for big tech companies trying to make big deals despite increased government scrutiny over whether they are abusing their power to harm rivals and consumers.

“Microsoft already enjoys a powerful position and an edge over other competitors in cloud gaming and this deal would reinforce that advantage by giving it the ability to undermine new, innovative competitors,” said Martin Coleman, chairman of a panel that conducted an investigation for the CMA. , said in a statement.

An FTC spokesperson did not immediately respond to a request for comment.

Microsoft said it would appeal the decision.

“We are particularly disappointed that after much deliberation, this decision appears to reflect a misunderstanding of this market and how cloud technology actually works,” Microsoft president Brad Smith said in a statement.